I don't think you can go wrong with the new 16Gb iPod for $199. I bought mine by mail before they even got to the stores here, and I loaded it up (about 110 albums and counting, a TON of podcasts, and there is still 5 Gb left!).
You **could** get something for $50-75 with 1 or 2 Gb [and I have a 1Gb Shuffle as well for workouts, and it's fine...but small]...but unless you are destitute, why not go for the "ultimate weapon"??? I was waiting for baited breath for the 16Gb for months, and it's worked out well. My theory has always been this:
If I spend $75 for something that has 2Gb, but I quickly fill that with music and podcasts (and I already had 6.5Gb of that stuff I wanted to keep before I bought the 16Gb unit), I'll either have to "make do" with a crappy (but admittedly cheap) solution, or I'll end up having to go fork out even MORE money to get what is really needed to do what I want. I chose the latter solution.
So my thing is this: It depends on how much music you will want to have loaded, and if you want to use it for podcasts as well...and as as an adjunct hard drive. So figure out your requirements, and then execute. Remember the shuffle does not have playlist capability (I love my Shuffle, but that aspect of it gets irritating at times).
The 16Gb iPod has been a great unit for me!
Kent