To answer your question, yes you can avoid the MSN fee, but as far as I know there aren't any simple hacks that let you use work within the installed OS. I've been trying to make a custom rolled version of Windows CE to run on the IA-1 (without much success btw), but you do have several options.
You can download and modify Jailbait (a Linux distro originally for the I-Opener) to work on it, but I only suggest this if you've got a good grasp of configuring Linux. You should read the threads here and for the I-Opener for some hints if you want to take that road.
Another option is to buy a large compact flash (256MB+) and install some flavor of windows (95/98/98SE) on it.
Give me an idea of what you actually want to do with the machine and I try to help as much as I can.