"Completely useless" is an exaggeration. They still do several of the things they were advertised as doing - tell the time, play internet radio and allow the setting of multiple alarms.
You could, I suppose, sue the local Chumby reseller in your country, if you wanted to (what country are you in, by the way?) It would be interesting to see how that worked out. However, if you think that this will work as a threat and somehow Duane will work faster as a result, then I think you are mistaken (Duane, please correct me if I am wrong on this).
Does your country require you to undertake a full scale legal action in a Court for consumer claims, or is there a more informal tribunal or similar for these?
In Australia, we have State-based tribunals that handle consumer claims. The process is less formal, with the idea being that consumers can handle it themselves without having to get a lawyer. Whilst this means that claims are easy and cheap to make, the downside (if you can call it that) is that the remedies are always quite modest and directly related to the actual loss suffered. For example, I am considering filing a complaint about a chain of stores that offered their 'VIP club' members a 6.5% discount. When I went to the store, they told me that the discount did not apply to the brand of goods I was purchasing. My actual loss is only about nine dollars. However, it's still worth making a complaint because it won't cost me anything; I'll probably get my nine dollars and, more importantly, they'll probably have to change their advertising to make it clear that some product lines are excluded from the discount. What I won't get is millions of dollars to compensate me for the pain and humiliation of not getting the discount.
How long ago did you buy your Chumbys? Here, they went off the local market a few years ago (can't remember exactly - anyone?) and that, in itself, would likely defeat any local consumer complaint because anyone who has one would have got several years of full-featured use out of it.