The best feature of the iPod is the UI (including iTunes + iTunes Music Store). I've played with a few other players, but the iPod is the only one that I picked up and intuitively figured out the controls.
The automatic library sync feature is also very nice to have.
If you use a Mac, there are a couple of other advantages:
1) Use the iPod as an emergency boot drive. Slow, but it works.
2) Use iSync to sync your calendar, addressbook, text notes, etc. A poor-man's PDA.
Sure, other players do some things better, but no other player does everything better. The iPod is the best "Total Package" player out there right now.
BTW, I have to disagree with the statement that the people in Apple's marketing group are a bunch of geniuses. Historically, Apple's had pretty pathetic marketing. If they were so good, they'd be selling a lot more Macs than they currently do.
Look at the big Pepsi partnership flop (yeah, Pepsi's the one that screwed it up, but it's the results that count).
Personally, I think the iPod sells in spite of Apple's marketing