SQ wize, i do not think the sony is that much of un upgrade over the fuze. I do tend to like its sound just a little better un-eqd, but sonically its main advantage is a quite good EQ which can make a LOT of difference (i hope you dont use the Fuze eq!)
Other than that here are its main advantages over the fuze
-much better screen with much better definition (=more info displayed on the screen, really perfect looking artwork even in thumbnails)
-much much better user interface, which makes it way easyer and intuitive to navigate through your music and have the info you want displayed before your eyes at the right time (i thought the scrolling wheel would be an advantage, turns out its not). Also the UI is much more responsive (NO latency when skipping songs), making you forget there is a software (firmware) between you and the hardware. Also the firmware is rock-stable.
-also much prettier user interface with nice themes/skins, which i think tend to affect the listening experience (how ugly is the fuze UI, really)
-MUCH longer battery life
CONS
-Impossible to delete a given song directly from the player, you have to do it from your computer. This is retarded since its possible to delete videos...why not songs? Why sony, WHY???
-Impossible to create playlists on-the-fly (at least with the fuze you have the go list which is pretty limited, but still)
-Format support limited to mp3, wma and wav (also atrac3 i think), vs the mp3,wma,ogg,flac,wav(and more?) of the Fuze.
And here is the other main advantage of the fuze, that you already know about : expandable memory with microsd!! Dont forget that 32gb microsdhc cards will soon be available!
EDIT: another advantage of the fuze vs the sonys that i had forgotten: RATINGS (which proves useful even though it could be much better implemented)