Erlotinib Study for Myelodysplastic Syndrome (MDS)

Inclusion Criteria: * Patients must have an established diagnosis of myelodysplastic syndrome (MDS) and have either: Low or intermediate 1 risk disease by International Prognostic Scoring System (IPSS) for MDS with symptomatic anemia (defined as hemoglobin less than 10.0 g/dl) or transfusion dependent anemia (defined as requiring ≥ 4 units of red blood cells (RBCs) administered with a pretreatment hemoglobin value of ≤ 9 g/dL in the 8 weeks prior to Day 1 of treatment in this study). Patients with anemia must have no response to at least to 6 weeks trial of erythroid stimulating agents (ESA) \[erythropoietin/ darbepoetin\]. Patients with serum erythropoietin levels more than 500 mU/ ml on diagnosis are eligible to the study without erythropoietin/darbepoetin prior treatment. Patients who do not meet anemia criteria are still eligible if they had thrombocytopenia with two or more platelet counts \< 50 x 10\^9/L or a significant clinical hemorrhage requiring platelet transfusions or if they had neutropenia with an absolute neutrophil count (ANC) \< 1 x 10\^9/L; Intermediate-2 or high risk MDS by IPSS. * Patients ≥ 60 years with Acute Myeloid Leukemia (AML) by WHO classification and myeloblasts percentage 20-30% (RAEB-t by MDS French-American-British (FAB) classification) are eligible for the study if deemed not suitable for induction chemotherapy or declined that option. * All prior treatment must have been discontinued 28 days prior to Day 1 of treatment in this study except (ESA) and colony stimulating factors where it should be stopped 14 days prior to start therapy on study, and hydroxyurea should be stopped 2 days before. * Prior bone marrow or stem cell transplant is allowed. * Secondary or therapy related MDS patients are eligible. * Patients with chronic myelomonocytic leukemia (CMML) are eligible. * Patients must have a performance status of 0 - 2 by Zubrod performance status criteria. * Pretreatment pathology materials must be available for morphologic review. Collection of blood and marrow specimens for pathology review must be completed within 28 days prior to registration. * No other prior malignancy is allowed except for the following: adequately treated basal cell or squamous cell skin cancer, in situ cervical cancer, adequately treated Stage I or II cancer from which the patient is currently in complete remission, or any other cancer from which the patient has been disease-free for at least 2 years. * In calculating days of tests and measurements, the day a test or measurement is done is considered Day 0. Therefore, if a test is done on a Monday, the Monday four weeks later would be considered Day 28. This allows for efficient patient scheduling without exceeding the guidelines. If Day 28 or 60 falls on a weekend or holiday, the limit may be extended to the next working day. * All patients must be informed of the investigational nature of this study and must sign and give written consent in accordance with institutional and federal guidelines. Exclusion Criteria: * Patients must not have received prior remission induction chemotherapy as treatment for MDS. * Patients must not be pregnant or nursing because of the potential risks of the drugs used in this study. Women/men of reproductive potential may not participate unless they have agreed to use an effective contraceptive method. * Patients who are known HIV positive are not eligible for this study.