The issues regarding the battery were not reliability but the duration of lifetime and the high cost of replacement. Now there are cheaper battery replacements (thanks to many people threatening to sue Apple); of which you can easily install yourself. Personally, I have a first generation 20GB IPOD (about 3 yrs old) which I've dropped & banged up but have had no problems with...and the battery still works! iPODs are not perfect solutions but they still seem to be the best option so far...(No, I don't work for Apple or any computer company!)
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I own a PJB100 with a 60gig drive. It's great and has worked flawlessly. Unfortunately, it's no longer available. I bought it based on a recommendation from Headroom--these guys do headphones and headphone amps. Great site for road warriors that love music. They recommend current MP3 players, and the iRiver is one of them.
Headroom MP3 recommendations
I second Campbelr regarding the battery.
Regarding your question: there simply IS no alternative technical - and let alone Aesthetics (!!) to the iPod run under Apple Lossless which is far superior to MP3 regardless its sampling rate! See J. Atkinsons measurements which he did on this format in recent Stereophile issue.
I'm also looking for a HD-based mp3 player that's as stylish as the iPod and maybe offers a few more features (FM/voice recording, more accessories included, no need for proprietary software to up/download songs).
The closest thing I've found is the iAudio M3, which almost does it for me, if it weren't for the external display/control unit. I have an iAudio flash player right now and wouldn't hesitate to buy another one of their products.
Iriver H series has recording and FM, which is a huge advantage IMHO. You can buy a Belkin add-on to get recording for the larger iPods but not the mini (something about a firmware problem). I settled on the mini ultimately - IRiver H series is the form factor of the larger iPods. The Rio Carbon looks like very stiff competition for the mini BTW, and it should be available just about now or soon. As for the looks of the iPod line, well sometimes I love the look of my silver mini, and sometimes I think it's too cute or pretentious; depends on my mood. I bought a kind of rubber skin that fits over it tightly and makes it look less cute while protecting the finish from scratches and perhaps providing some protection against falls.