mp3 players seem to boil down to storage, size and ease of use, earphones are where most change could occur IMHO.
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I would still plug for te Ipod. It WILL accept MP-3 files.
Only you have to use the i-tunes interface. That helps categorie all the songs, Artist/ Album/ Song Name / etc so you can Quickly find what you want to play.
I have also used a I River N-10. Its just 512 MB, richer, more mellow sound, but micro dynamics not so good. Also, it died on me :-(
IRiver too needs you to load song thru its own program interface, again, to catalog it in an orderly database to assist searching.
amplifier nut is right, there's nothing proprietary about the format of music for the iPod. It will handle AAC (16 to 320 Kbps), MP3 (16 to 320 Kbps), MP3 VBR, Audible (formats 2, 3 and 4), Apple Lossless, WAV and AIFF, which covers just about anything you might find from any source.
The confusion about the iPod's being proprietary probably comes from the fact that if you buy any songs from the iTunes store they're in a protected AAC format and can't be played on other devices. There's nothing that says you have to buy music from Apple, though. I've got something like 40 Gb of music in iTunes and have never bought a single song from Apple. Everything is in standard mp3 or lossless formats and can be copied to any device I want.
The idea of 'drag and drop' seems simple but, in practice, managing a collection of more than a few dozen tunes becomes a real pain in the butt using a standard file directory structure. Unless you're completely disciplined and have a perfect memory, trying to remember where you put things and keep track of what you've updated and what you haven't is very difficult.
I've got an Archos Jukebox which is probably similar to what you're envisioning. You plug it into a computer and it shows up as a USB drive. You can then drag folders of music directly to the drive, either from Windows Explorer or the Finder on a Mac. It still requires a 'proprietary' application running on the Jukebox to handle navigation through the music and even the best third-party application for that, RockBox, is incredibly primitive compared to the software on the iPod. It requires that you remember exactly how you organized things. You find yourself manually scrolling through all your music trying to remember things like whether you filed "Talking Timbuktu" under Ali Farka Toure or under Ry Cooder.
The iPod dominates the market not because those little white earbuds look so cute but because both the iTunes software on your computer and the iPod interface itself are way, way better than anything else available, at least for the uses most people have for portable music.
And I don't even own an iPod, because I wouldn't use one enough to justify replacing the Jukebox. When the Jukebox dies I'll get an iPod, though.
Don't buy an Iriver, I have the H10 and hate it. It will turn itself on spontaneously and run the battery down (yes with the lock on), it locks up and needs to be rebooted too often, and the pic quality sucks. My daughter has a video ipod and that's what I wish I had got instead. The only postive is that it also has an fm radio, that is why I got it and that seems to work pretty well.