Accessories, ease of use, built into iTunes, shows up as an external
HD, etc... are reasons I remember reading from iPod users.
Dell DJ isn't bad for the price either. Rumored to be manufactured by Creative. Has an LCD/FM remote add-on for ~$50-60 and longer battery life than the iPod.
Others to look at in that price range (sorry to make the choice harder): iRiver iHP-120 and Rio Karma 20.