I've not worked with GUIs in embedded linux, but I guess u can use the SBC9302 embedded linux board from SPJ Systems, Pune. **broken link removed**
I use the same board, but without the display.
They give u a colour LCD display, and QT for embedded systems. QT has always been known for its ease of development.
Hello. The question is not right (which is better?) What gui to use is depend of your project demands.
nano-x (www.microwindows.org) gui is famous for it very small size (<100kb). It suppots windows drawing and it has win32-like API. There are some extentions to it (such as FLTK and PIXEL with widgets set).
With QT you can obtain a very powerful and polished gui, but you have to learn it's API (signals, sockets), and QT footprint much more than nano-x (>1Mb). If you even can run X server you can use QT or other libraries such as GTK, wvWidgets.