I used to use my Dell Axim X30 and a 1gb SD for MP3's. I personally hated the experience which is why I finally got a real MP3 player. I had serious issues with hissy playback, it sucked battery life, and whever I turned the PDA off and on WMP had issues reading the music off of the card. I also tried using other MP3 playing software and got rid of the reading errors but still had the really hissy music.
This may not be a typical experience by any means but it did convince me to drop $260 on a Creative player. I guess it would work in a pinch again if needed but for now I am going to wait until the PDA MP3 players are more mature, or get one of those MP3 playing phones.
-spike