Pros: Small, Compact, Enough space for your favorite songs
Cons: No way to visually know what you're listening too, No FLAC support, no way to expand storage, 1GB Storage
This is one of my two current iPods (the other being the First Gen. iPod Touch). I initially purchased this model to keep my music somewhere UltraPortable for my jogs and when I'm in my car (since the Touch interface on the iPod Touch is very distracting when you're walking/driving).
I find this iPod very useful, since I can throw it basically anywhere and it clips to my jeans when I'm just walking around campus with my headphones on. I keep my top songs here, and I usually change a couple every now and then to keep myself entertained.
I think it's a great first iPod. However, I must say that the No FLAC support will be a dealbreaker for some or you'll have to adjust and choose another format that is Apple compatible. Overall, for $50 it's a great way to listen to your high end headphones without breaking the bank.
They sound great without and amp with my V-Moda M-80s. Before that I used to use a pair of Skullcandy Uprock that I found in a bargain bin for $12. The iPod Shuffle can also be used as a portable drive.
I lost the charging/sync cable and that was a pain to find, and I paid 15$ for a replacement. I needed it since it's the only way to sync/charge the iPod. Another thing is that there is no way to expand the storage, which is a too small for some. At 1GB, I find it as enough. The newer version is 2GB, which is pretty decent.
I suggest you give the newer version a try or perhaps try a Sansa player, which supports many other formats.