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I bought the Nomad II about a year ago for my wife and we love it. Small, easy to use, and trustworthy. Pretty cheap by now too I bet. We only have the 32mb one but it has treated us well. Good luck in your hunt. >>
In the time-honoured tradition of recommending products that one has already bought, I'll also have to tout the Nomad II as a great MP3 player. Fantastic audio quality, good volume, slick and sturdy, able to take 128MB SmartMedia cards. Here are some more impartial places you can check out for information, though.
PC World has a 2nd-generation MP3 player round-up entitled "A World of MP3 Players" that talks about a lot of the players now in your price range.
music.cnet.com has a section dedicated to pretty much every portable MP3 player out there, and allows valuable owner feedback for you to read up on before making a purchase. I should note here that 90% of people tend to be idiots who majorly thrash their MP3 players around, so take the "it broke after two weeks!" whiners with a grain of salt.
Google has a web directory for portable MP3 players set up. Be sure to check that out as well.
Speaking for only myself, I'd never go for a CD-based MP3 player. Too large for one thing, I drop my player into my pants pocket without too much of a bulge going on. Second, portable means
portable - I have no personal experience with MP3/CD players but regular Discmans (Discmen?) skip way too much for me to spend and pray for something different. Solid state all the way, even at the price premium it takes. 128MB on a SmartMedia card that I can swap out for more tiny SM cards is just fine with me.