The iPod is definitely worth the money. If you think 299$ is too much and 199$ would be okay, wait a month or two and save a bit. THEN buy. It's worth it.
I must say, the iPod is one of those things that don't lose their worth as fast as other stuff. Gotta elaborate shortly:
Ever bought an MP3 player? It's cool for two days, after that you still get the envy from other people, and then you'll slowly start to stop using it. Depending on how you are built (mind-wise), it'll take a longer or shorter time. Because there's always one feature missing and or one thing is strange about it. The iPod, however, is different. Also: While your computer does not only get old compared to the newer models (those that always seem to be 'rumoured' just after you've bought an 'old' one), it also becomes obsolete faster, because newer software can do things you might WANT to do but (maybe) can't because your computer gets old. The iPod will play music in 10 years, like the CD player I bought 10 years ago. Unless I sell it or (knock on wood) it dies. Sure, some day there'll be newer, cooler, smaller (size), bigger (harddrive space) and more capable iPods (or something different). But the iPod will still be playing my tunes. I had 4 GB of music when I bought it and have about 5 GB now, half a year or so later. I might - someday - think the 10 GB aren't enough. But that'll be in a time when I might also want to replace it, because I need something that also holds my MPEG-4 movies.