Kris: Like all products Apple makes, the iPod is more expensive than most of the other players on the market. But it's definitely the best. I admit that I haven't used other MP3 players, but I've heard of all of them having USB connections (none I've heard of sport USB 2 connections), and having cumbersome interfaces.
The iPod is hands down the most elegant of all MP3 players (even TechTV thinks so, despite its hefty price tag!). The scroll wheel interface is REALLY intuitive, and the FireWire connection ALONE makes it worth the high price tag, because you can actually USE the darn thing as an effective hard drive!! Plus, the hold switch is a nice touch, so you can put it in your pocket and not worry about any of your settings changing while its running.
Another benefit of the iPod (this functionality may be in other MP3 players as well) is that its firmware is upgradable. No doubt you've heard of the iPod Software Updater 1.1 which allows you to store contacts on your iPod now. This is because the firmware CAN be upgraded.
The reason this is important is because if new formats of music come out, Apple can upgrade the iPod to support them. The MP3Pro format may well take over in a few years, and Apple will probably be smart enough to release an updater to the iPod software to allow it to play them. So you're not limited to what you buy.
As you can see in my sig, I have an iPod. I bought it out of my own pocket (the 5 GB one, for $399). I said this in another thread, but I'll say it here too. I was wanting some way to listen to music on the run, but I'd never really researched any MP3 players or anything else. When the iPod came out, I knew right away that I had to have one, because of its elegance and intuitiveness. The iPod just does away with EVERY SINGLE BOTTLENECK that exists in all other MP3 players, making it the best one on the market. I must say that the iPod will remain the best MP3 player for a while, because no one can match the scroll wheel interface.
I hope that helps. I admit I know nothing about the MiniDisc format, but this post should help you with the benefits of the iPod.