Some people are willing to pay $299-$499 for the 15GB-40GB iPods for the use of it, the storage, the ability to store their entire collection, and other features like the voice recording and media card storage.
Some people are willing to pay $249 for 4GB because of the style alone. But, it also has awesome navigation design, good feel, well thought out design, the reputation of a proven product behind it, a small size, and colors.
ALSO, about Muvo vs iPod mini... or anything else for that matter... one of the cool things about the iPod, iPod mini and iTunes, is that you can sync by playlist. So, with a few click of the buttons, your iPod mini syncs with different playlists, genres, albums, etc, etc... Unless you're going on a month long trip, there should be no worry about song choice. And unlike the Muvo, dragging and dropping that many songs, etc... is a pain when you wanna change what you have on the player.
Last thing, the iPod and iPod mini can use songs from the iTunes Music Store, the best and most popular online music store to date. And starting Feb 1st, 1 out of every 3 pepsi bottles will win a free song.