I just bought the 512 Version (which is the exact same except for capacity) and here are my thoughts (which answers a lot of your questions so far).
One said FM reception was poor their area of LA. Well I'm in the Bay Area, and reception is great. I don't use FM because I have no need of the radio, but my girlfriend does and it is really helpful how the TX FM handles this. You just hit Autoscan, and the player will search the FM band for every station it gets properly, then save them as presets. Afterwards just hit the rocker switch to switch to the next preset (this can also be done manually).
I've read many reports of the rocker switch being disliked or the ui being poor. I completely disagree. I think the rocker switch feels quite rugged and well made to me, only takes a few seconds to get used to fast forwarding, skipping songs, and accessing the menu. The ui is fairly standard fair, and I think it does it's job well. Accessing some new option will probably require you look down at it though, eyes-free operation is something that I at least can not handle yet.
The fact that it uses an AAA battery was one of the only reasons I bought this instead of the Shuffle. LithIon batteries start to die after a year, and are expensive to replace (assuming the shuffle's battery can even be replaced). I have 4 NiMH rechargable AAA's that I just keep in the charger all day. When I go out I keep one in my jacket pocket (they are so small how could anyone not have the space to keep one handy?) and another in my player. I replace the one in the player every now and then, but I don't sweat it because it gets great battery life.
The player's construction is great, the battery cover snaps into place tightly, and the USB module connects tightly and snuggly with the battery compartment so that you couldn't possibly have a fear of it coming apart accidentally (simply could not happen). I haven't exactly been dropping or smashing mine, but it is lightweight enough that I don't exactly worry about it much. Feels like nothing at all in your pocket. For me it is the equivilent of having a tube of chapstick in my pocket, easy to forget it is even in there.
Before buying it I didn't think a screen was necessary, which is why I was considering the Shuffle. Now I know that I need a screen. Maybe if I listened only to music it wouldn't be the case, but I listen to a lot of audio books as well. What I do is keep all my music in the Root directory, and a few folders with portions of audio books in them. When I want music I just tell it to shuffle the root folder. When I want a book I tell it to sequentially play that folder instead. All handled in a matter of seconds through the interface.
Mine came with an arm band (that seems OK but I never use), and a Belt Clip. Possibly the best belt clip I've ever seen for anything. It is a hard plastic shell that fits over only half of the player. It just slips in with no effort, leaving all of the controls completely free. Then, for reasons of engineering genius, the player is stuck in place, virtually impossible to remove until you pull it out in exactly the right way (which actually took a bit of experimentation to get right, it isn't like they explain it in the manual). When I leave the house to go anywhere, I attach it to my belt and thread my earbuds up the back of my shirt and hang them under my collar around my neck, then I'm never more than 4 seconds away from my music.
NEGATIVES:
The included earbuds are awful! I'm not talking about sound quality, my ears aren't good enough to be able to talk about that really. I read lots of reviews that they are uncomfortable, which I didn't pay much attention to because in my experience all earbuds become painful after an hour or two. THESE HURT AFTER 10 MINUTES. They are gigantic things and I can't stand to wear them. I grabbed some $10 earbuds at best buy that I like instead.
When the backlight is on there IS a noticable buzzing interference that comes through the headphones. Granted, this is easy to forgive because it is only for the 3 seconds or so that the backlight shines for when a menu option is selected. And the backlight can be switched off during the day so that it never happens (although I've found this to be more hassle than I care to bother with). Still, it is more annoying than I was lead to believe by reviewers. Every time the player is fastforwarded, rewound, paused, played, or the volume is touched, there is that buzzing sound for 3 seconds. It doesn't make me regret anything, because this is the perfect player for me, but I wonder why Creative couldn't have done something about it? Annoying.
I know I'm longwinded. For anyone who wanted some information, I hope that helped.