They show both portrait and landscape mode in the video and it doesn't look like there's a problem though.
No free-range internet? That's disappointing.
There are 6 devices with wifi and touchscreens for less than $200.
This website has videos and ifnormation on a lot of new devices: http://www.shanzai.com/
It comes with Android 1.6 but there's a comment on the above website saying it can be upgraded. You can also find it for less than $100 on sites like alibaba.com and dhgate.com but you will have to buy more than one unit.
On a sidenote, the seller I linked to is flexible about what price they stick on your package. You don't want to overdo it though, otherwise you might end up paying even more tax than normal.
