Well, I've got an iPod shuffle, which isn't as good as the conventional iPods, but it's good for a USB flash drive. So basically instead of getting a news usb flash drive of 512 mb I just got a iPod shuffle instead. And so far I seem to be quite happy with it. I was going to get a nano, but I think i'll get something like a Palm or a Treo instead, since it can do what the ipod does (sort of) and more.
Buying and iPod is totally worth it unless you aren't going to use it too much. I mean what are you going to do with a 60 GB iPod if you only have a few songs. Besides iPods don't have radios as well so if you like an assortment of songs then you might not want to go in for an iPod. Otherwise it is well worth it.