To the OP, I have a similar problem to yours. I'm working in China and use English and Chinese everyday. My Chinese is less than perfect so Plecodict is essential to me. I've also been on a quest to find the smallest/most usable device for Plecodict.
Right now I have a Treo 680 and an HTC Touch. The 680 is the smallest possible Palm OS / Phone solution. It's slightly smaller and lighter than the 7xx series as well. The HTC Touch is, AFAIK, the smallest of type of Palm OS or Windows mobile device. I've only just purchased the HTC Touch but I'll weigh in with some useful hints for the HTC Touch well as some initial comparisons between the two devices.
The Touch is probably cheapest in Hong Kong. It's as low as 3600 HKD without too much looking, so about 460 USD. In HK, they sell it as an English version with CE Star bundled for Chinese input and display, or they sell it in a localized Chinese version. I do not have any experience with the localized version but I hear that: HK trad. Chinese ver is Wifi enabled and has no problems with displaying English. I do not know whether the interface itself can be converted to English, but I imagine it can be. It should be capable of displaying simplified as well.
The Chinese market touch is the same as the HK version but defaults to simplified instead of trad. chinese. However, supposedly its firmware does not have wifi enabled. You should be able to overcome this limitation through a firmware upgrade. I have flashed my own firmware (to free up storage memory) and it was successful though a little complicated. If you flash your phone with modified firmware, it may invalidate your warranty.
So, if you buy the Chinese version of the HTC Touch, you should be able to flash it into an English version with wifi enabled. As for input and displaying Chinese, I found CE Star a bit too much of a bear and have switched to a Chinese font with accompanying hack to enable it for displaying Chinese and ZT4A as my input. So far, I find it a better combination than using CE Star.
As for whether I prefer the Treo or the HTC Touch, the biggest disadvantage of the Touch is the lack of a keyboard. Having used Treos since the 600 model six years ago, I have become spoiled. I find I am considerably quicker and more efficient with a keyboard available simply because I can input faster. However, the form factor of the Touch cannot be beat. It is extremely comfortable to hold, fairly comfortable to use and much less of an issue in my pockets than the 680 is. It's lighter than the 680 and almost half the thickness, which is a big plus. I've been trying out many different input softwares for the Touch to try and replicate the Treo 680 experience or at least come close to the speed but it hasn't been all that successful. Also, I find the touchscreen on the Touch isn't quite as sensitive as that of the Treo.
I'll update at some point with a proper review and comparison.
