Just got my PK3s. Brief listen confirms everyone's opinions of them, they are superb for the money (I paid AUS$39 from local dealer Headphonic).
In case it's not completely clear from the earlier posts (and souperman makes it pretty clear!) these earbuds are SO much better than the standard iPod earbuds, and the cost is so reasonable, upgrading should be just a no-brainer. I am comparing against the new 2nd gen iBuds too - the ones with the rubber sides that don't sound too bad.
I also have KSC-35s and love them, but they are a bit of a pain to take on and off. Also they don't have the shove-them-in-your-pocket-just-in-case factor. Hence I like earbuds. And thanks to the PK3s I don't have to suffer poor sound quality. Couldn't be happier.