And $100 more gets you double the capacity with a 60GB iPod w/video...
And with the iPod you get an accessories market that is second to NONE.
It's not that the iPod itself is considered 'cool' it's because every single accessory maker on the planet is creating new products to go along with it.
Which was Apple's plan all along with the universal dock concept.
So yeah, have fun hooking that non-Apple MP3 player into your car stereo via a hackjob consisting of either audio-in plugs or badly-spliced RCA cables.
My Alpine with it's iPod dock connector pwns that garbage every day of the week.
iPod goes in glove box, and it's all controlled via the head unit.
Sounds frickin' PERFECT as well.