I've got the iRiver H320... it is coooooooooool
Yes, it is expensive (as much as an iPod), but its so much better.
Much better sound quality, view pictures and even videos (with a firmware upgrade), USB host, etc...
Have a look on: http://www.iriver.com/
In terms of iPods... I have seen cases of music spontaneously disapearing off iPods and then not being able to connect it up to any computer withput it freezing and then hanging.
There are other cases i've heard of other problems, but they are usually fixable (but it is a pain in the ****