My daughter got a Zune last Christmas, still loves it. My son just got a Walkman mp3 player this Christmas, loves it. I've got a Sony Walkman cell-phone w/ a 4gb memory card, love it.
In all cases, we start w/ a CD, then I rip it w/ EAC/LAME into mp3's. On good systems, I can tell a difference between my mp3's and downloaded ones.... w/ the headphones that come stock w/ a device like an ipod or a zune, you might be pressed to tell the difference between something from itunes and one I made, but, if I drag you over to my buddy's house and we plug my mp3's into his McIntosh system, and compare it to itunes on an ipod, you can really tell the difference.... OF course, the trade-off is, even using a variable bit rate, my mp3s are gonna be a good bit larger than what you would get from itunes, but, I'm keeping more sound data. (Get some good headphones, though, Grado or Sennheiser (like their PX100), and maybe a headphone amp.... even make one in an altoids box if you like....).
I have to admit, I'd like an iTouch, mostly because I could hit the web w/ wifi.... I'd still use my own CD's/mp3's instead of itunes. I found itunes useful for hunting down a clip of a song on-demand to see if the song I was trying to find is what I think it is or not, but, I just can't see using it to get an inferior product as far as music quality. I think itunes is easy to use, the music just isn't as good as a good CD rip.....
Anyway..... I'd not necessarily avoid an ipod, but, I'd not necessarily go w/ one, either. I like the new zunes, would consider one of them, the itouch (for web mostly), I like the Walkmans..... there are choices out there.
FWIW....