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I picked up a black neoprene case made by Op/Tech. It is an exact fit for the ipod. It offers protection from bumps and has a pretty good belt clip. The closure is a contoured neoprene flap held closed by velcro. It is exactly what I was looking for. Well, almost. I would have prefered a horizontal orientation rather than vertical to minimize interference when I am doing such things as sit-ups. Can't have everything.

I found the case at Fry's electronics, near those small personal communication radios. Odd, because I had found nothing close in the rest of the store (I was on a quest, by god).

I checked out the op/tech website, and they have caught on to this bit of serendipity. They now have an official "ipod case". Same thing with a hole punched in the top for the headphone plug, I would conjecture.

At any rate it works great, and was only $13. One with an apple logo is $53.

Just kidding on that last price