Since $50 (and more, considering batteries, cables, etc) is still some money, let's build a cheaper robot with parts that can be reused in future projects and with possibility of expansion.
This one, however, is an hexapod (6 legs) controlled by 3 servos.
Comparing with the original $50 robot: (O= Original , H= Hexapod)
O: Hitec HS-311 servo
(modify the servo) 8.99 2 Servocity.com (Plus shipping)
H: 3 cheap chinese servos for the hexapod. The problem is these are hard to modify for continuous rotation but you can still try.
3 x servos (4.5g or 8g since they are small) = $9 (plus $4 shipping) shipped at bidproduct.com Savings = $9
O: 5V Linear Regulator .48 1 DigiKey.com
H: MC7805CT-BP 0.4 at digikey. $0.08 savings, every penny counts xD
O: ATmega8 AVR 3.66 1 DigiKey.com
H: ATTINY24-20PU , less memory and less input/outputs but is more than enough for starters. 1.91 at digikey Savings: 1.75
O: 28 pin DIP socket 1.26 1 DigiKey.com
H: We won't need the DIP socket.
O: 220uF+ Electrolytic
Capacitor .28 1 DigiKey.com
H: You can use the same or any 47uF+ electrolytic capacitor you have (unless it?s too big of course).
Capacitor .13 2 DigiKey.com
Not necessary, we will use the internal oscillator of the AtTiny. (0.26 savings)
breakaway male header 1.63 2 DigiKey.com
Not needed. 1.63 savings
340ohm resistor .88 5 pack DigiKey.com
1.62Kohm resistor .49 5 pack DigiKey.com
LED .19 1 DigiKey.com
CdS Photoresistors 2.79 5 pack RadioShack
No changes here.
O: Grid-Style PC Board
with 356 Holes 1.79 1 RadioShack
H: Small Solderless Breadboard. I got one for $4 but the price will vary. Let's say $5. Extra $3.21
Enclosed 4 AA Battery
Holder (with On/Off switch) 1.89 1 RadioShack
9V Battery .25 1 any store
O: 6v 1400mAh
NiMH Battery 16.50 1 onlybatterypacks.com
H: NiMH AA Charger Plus 4 1800mAh batteries $7.5 at eBay. $9 Savings
O:AVR STK Serial Port
Dongle Programmer 11.95 1 SparkFun.com
ATMEL AVR ISP Programmer For Parallel Port STK 200 /300 $10 Shipped (about $6 savings)
As you can see, the savings are many and there's still room for improvement, like purchasing only 2 servos and modifying them for continuous rotation (but the truth is these $3.00 servos are very basic and most likely you will break them if you try to make modifications.)
As Structure you can use a block of HDPE, wood or just using rubber bands to hold the servos in place. Also, since the base of the breadboard is adhesive, you can stick it to a hard surface like plastic or wood or even stick the servos to it (plus using the rubber band).
You can make the legs using ice cream sticks, wood, plastic or anything you can attach to the included servo braces.
And that's it, I will post some pictures when I recieve the servos since they take like 3 weeks to arrive to my country.
I hope you like the idea.