GadgetLover:
I know that there are MP3 players out there that are almost as small as the iPod and that have even larger hard drives (even larger than the 10 GB iPod introduced at MWT), but there are 2 features the iPod has that make it THE ONLY MP3 player to buy.
What are these 2 features? FireWire and ease-of-use.
Like dlookus said, if you have a USB connection to a 20 GB MP3 player, you basically wasted all of your money. It takes a HECK of a long time to fill something like that up with USB, and it's not worth it if you want to try and bring files along with you or add/remove music from your MP3 player. In my opinion, if an MP3 player has a lot of storage space but only USB connections, it's not worth buying no MATTER how cheap it is, period. No firewire, no buy.
Second feature is ease-of-use. How many other MP3 players do you know auto-sync your music when you plug it in, or can easily scroll through a list of 1000 songs, or allows you to change the equalizer settings with 1 swivel of the scroll wheel and 1 click of a button? How many of those now have drag-and-drop contact support? These easy to use features also make the higher iPod price justified.
These two features alone make the iPod the ideal MP3 player, even though it has a relatively steep price. I never once thought about buying an MP3 player until the iPod came out, because I knew they were all clunky and were all really slow. As soon as the iPod came out, I knew I had to have one. This is the beauty of the iPod, and why it will still sell at a higher price, even at $499.