Well, it's Linux, so theoretically it is possible, but it wouldn't be easy, reliable, fast or necessarily smart to do. Every tablet that ran Maemo has had a 800 x 480 screen, so anything smaller wouldn't be a very good idea... I could come up with 200 other reasons to why it wouldn't work for your purposes, but if you want to find them, you can.

If you get a device that has Linux drivers available, has a good enough screen, fast enough processor, or anything else you might need, go ahead, good luck installing it. If not, I'd just pick up a N800 for $100 and wait for Mer^2.

Best of luck.
-fillip