I've been looking at the various options for a small (< 12 inches), cheap monitor for a while. Most have been covered above and elsewhere, but I'll share my findings in case they are of use to anyone.
A great option for home/car use, but while there are many small displays with a digital input on the market, none of them are particularly cheap. If you need a good quality, high resolution display hooked up to the Raspberry Pi's GPU though, you don't have much of a choice. Both Onkyo and Sony manufacture digital photo frames with an HDMI input that might be worth considering.
LCD/OLED panel connected to on-board video interface
(Assuming the interface is still present on production boards.) This is probably going to be the best option for those considering a portable device, likely powered by a battery. Unfortunately I suspect it will also require a lot of hardware voodoo as these aren't consumer interfaces. I do recall a now discontinued Nokia handset (3310?) that became rather popular at the end of its life due to the display and display interface it employed, which made repurposing it relatively simple. Perhaps an existing device with a display compatible with the Raspberry Pi can be identified, in which case used and damaged devices could be bought up cheaply (via eBay) and their displays harvested. Investigating devices using the same Broadcom processor as the Raspberry Pi might be a good place to start.
Discussed at length elsewhere. The displays aren't that cheap, but neither are they terribly expensive if you opt for a non-touchscreen model. The two big drawbacks seem to be:
1) I could be wrong as I have no direct experience with these displays, but as they utilise a second video adapter, I would have thought that they would be unable to make use of any of the functionality offered by the Raspberry Pi's GPU - H264 acceleration, OpenGL, etc.
2) They cannot function as boot-time displays (AFAIK) and must be utilised through drivers developed specifically for them. DisplayLink, one manufacturer of USB-connected display technology (most devices on the market seem to use their interfaces), offer drivers here: http://libdlo.freedesktop.org/wiki/
Apparently they are included with Linux kernel 2.6.38 and later, although I don't know how many pre-compiled kernels are configured with support enabled. Probably not too many, especially in the world of ARM where small, light kernels are the order of the day.
Relatedly, USB to VGA adapters are also available if you have a VGA display that you need to hook up. Looking for an HDMI to VGA converter would probably give a better result though, even if it is quite a bit pricier.
The big downside here is a loss of fidelity. Sometimes though, a small, low resolution display is enough. If you don't need anything above and beyond this then a display with NTSC or PAL composite input is almost certainly going to be the cheapest option. A number of threads have looked at hooking up small, portable televisions or DVD players with an AV input, but these tend to be more expensive then they need to be due to the extra electronics included. If all you need is the display, one option exists in the form of automotive reversing monitors. Here's a quick selection from eBay, all for under £20:
Home users would require an inexpensive power adapter, but if you're planning to use one in a car, it's ready to go. Even those considering portable, battery-powered projects might be able to find some way to satisfy the display's power requirements.