Easier to install e.g. wall mount - one unit and less cabling.
CONS
If the DVD or the TV breaks, you lose both units.
The DVD can often be noisier than if you had a separate unit.
You can't upgrade the DVD separately (minor point as usually a TV/DVD combo is for a bedroom or playroom and not your main TV).
The tube (CRT) TV and DVD combos are not the most compact if you intend haging on the wall. There are some LCD and DVD combos (LG do one and Panasonic do one) but these are not cheap - several times your budget, in fact.
I would guess that you are unlikely to find a region hack for the DVD player.
As a final thought, for the money, you will have no more worries about build quality of the DVD in the combi than a standalone DVD player at this pricepoint. Given the high cost of repair, you will probably replace the entire unit if it gets faulty in a few years time as it will not be economical to fix either component.
You are correct; I should say, you lose the unit that breaks.
If the DVD goes, you can of course still watch TV, or connect in an external DVD player (or wirelessly link one it via a video sender, as discussed elsewhere on AAM).
If the TV breaks, in theory you could connect the DVD via SCART to another TV but it is probably too physically awkward.