I have no experience with Colorfly or any other audiophile players - in Australia it's difficult to secure them, and most of them have a short battery life. I've read that they sound amazing though, so if you want the best possible sound on the go, it might be worth buying the CK4 and C&C stack.
I do own a Cowon Z2, and I'm happy with it - I don't think it sounds artificial or cold in a noticeable way, and while its screen is no Retina display, it plays HD videos of just about any format very nicely. No messy conversions required as it supports a plethora of formats. Battery life with videos is about 9 hours, though, so I'm not sure if that's enough.
Also, about the Gingerbread - the Z2 has access to lots of apps via the Google Play store, albeit not out of the box - just Google how to get it working from other forums, it is very simple. Gingerbread may not be as smooth as ICS or the new Android, but it's nice and responsive, and I'm not worried about it being outdated. The Z2 is not a smartphone, just an mp3 player with convenient access to wifi, email and simple apps. It is a very nice-sounding player to my ears, and I am happy with it as my portable audio solution, and its EQ suite is pretty good if you like that sort of thing (I kinda like the innately analytical Cowon sound, as all my headphones are warm-sounding).
All in all, both of your choices seem like good options, though I like my Z2 for my particular uses.
If you prioritise videos, the iPod Touch 5 has an incredible screen and strong battery life - if you could adapt its lightning connector to a LOD and use an amp, it would probably sound way better than my humble Z2 by itself. Not sure if you want to go Apple, though; I decided to keep away, even though I use a Mac.
Edited by StyleElements - 1/22/13 at 7:16pm