I was on the lookout for an Android tablet, but couldn't find anything decent under £300. There's a lot of cheap crap out there, as people have said. I wouldn't consider anything other than 3.0 Honeycomb on a tablet. You want decent hardware, but that's no good without the right software to get the best out of the hardware.
I have a Samsung Galaxy S phone, it was running 2.1 Eclair and it drove me crazy - buggy and laggy as hell. It would switch itself off for no reason!! Since I updated to 2.3 Gingerbread it's a completely different phone, zippy no lag issues or freezes. All due to OS software update.