(I believe Raspi developers are thinking of making such a device already and have a kickstarter like campaign going.)
As far as I know, what they have in mind is an _actual_ HD LCD monitor, not a sub-sampling one - exactly because small stuff is unreadable on those. Only a 720p one to be fair, not 1080p, but still HD. To be honest, I would myself give an arm and a leg for such a device - but not the ~75 quid (plus shipping) they plan to sell it for (yeah well, apparently I don't value arms and legs too highly).
A 480x800 panel with a HDMI input would be an entirely different beast. So which one are we talking about?
-- They are common and sold as reversing camera screens for cars and cost about £30. The RTD2660 scales incoming HDMI 1024p to 800x480 screen and very effective.
Example: http://www.aliexpress.com/item/raspberry-Pi-cubieboard-7-inch-digital-LCD-sc...