Everyone gets hung up on the iPod, but it's iTunes that makes the difference. There's nothing remotely comparable for flexibility, features and ease of use. iPod+iTunes is a hardware/software combination that stands astride the industry like a colossus - and deservedly so.
Quick newsflash for Kingfrog (above) - Apple announced last week that they have gained agreement from the labels to remove DRM from iTunes. Keep up at the back!!