There are two advantages to the iPod IMO
- iTunes integration.
If you like that sort of thing. The songs come with DRM which means that you are basically renting them, not owning them. I prefer to buy real CDs and rip them. That way I own them.
- User interface.
This has worth.
I personally bought the Creative Labs Nomad Zen because Amazon had a special on the 40GB version at $199 and the Rio Karma is supposed to (still) have problems. (40GB: I still filled it and had to choose what to leave off.) I'm sure the interface is shitty compared to the iPod, but I can select songs to play just fine.
Also, I think the first thing is to get
better headphones.