Diamond's idea behind the HD 3650 1 GB was certainly a good one: Add more memory and an HDMI connector to improve on AMD's reference design. Unfortunately the final product did not turn out that well. Since the card's GPU is already quite weak, adding more memory won't make any difference at all. To even have a scenario that could theoretically benefit from more memory you need to run high resolutions, with lots of anti aliasing and pretty eye candy turned on. With any HD 3650 you won't see playable framerates at those settings. Even if the extra memory could double the performance (which it won't) you'd go from say 3.5 FPS to 7 FPS - still unplayable. The use of slow clocked DDR2 will actually make overall performance worse compared to cards with less, but faster memory. Don't get me wrong, this card will play most current games fine, but you have to accept compromises in resolution and details settings.
Integrating an HDMI output on a graphics card is an excellent idea in my opinion, especially when the card has HDCP and audio support. Such connectivity would greatly benefit the users of media PC systems, but all this becomes irrelevant with the noisy fan. Nobody wants to hear a constant loud fan whine while watching movies. Since Diamond left out the fan control circuit the fan will always run at full speed, no matter if the card is idle, playing a movie or running an intense 3D application. The cost saving from this is extremely small, all recent ATI GPUs have thermal monitoring AND fan control integrated inside the GPU, all you need are a few dirt cheap parts to drive the fan with sufficient current. Older cards required a separate fan controller, the LM63 for example, which was fairly expensive with prices in the $1 to $2 range.
Overall my recommendation for customers in this segment would be to look for a HD 3650 card with 512 MB or even 256 MB of faster memory, maybe even a passive card.