I'm not sure of the 505 (I have the N10), but I can't imagine it being much different. Overall, ATRAC IMO sounds way better than many of the MP3 people get, and definitely better than the WMA I used to have. Mine isn't the loudest thing on the block, but it did okay for me. As far as you encode at say LP2 or SP, you're fine. LP2 is close enough to SP to where you have a hard time hearing a difference, and for as much more music you can fit on the MD, it's worth it. I understand about your home stereo, I have a decent NAD setup myself, and I don't think and portable audio device will quite compare, but I will take an MD player over MP3 any day. Also as far as skipping goes, my portable CD was horrible. With MD, I just stuck it in my pocket and I was off.