Gave my 5 year old 1st generation IPod away in December and got an new one (30 MB for 230 bucks) at pcmall.com. There are so many useful accessories out for the iPod, like chargers, speakers, cables, transmitters, etc.
It comes in different sizes and prices, from the small iPod shuffle for 75 bucks, to the Nano for 140 bucks, up to the Video iPod. They do a lot more than just play music. When there is need, they work as a dictaphone, an external hard drive, a video player for Ipod movie files, they govern your stereo system, play music over the car stereo, etc.
My old one got dropped several times and looked as if it had gone through a war, but I never had the slightest technical problem in all the years. iTunes works fine with both, Mac, and PC.