I live here in Japan and I just visited a Yodobashi store today. (amazing selection of audio equipment) I tried out the C2 and J3 with my Grado SR80s. The store was a bit busy. My headphones have about zero isolation. They both seemed to have nice sound quality(better than my ipod touch 2nd gen or 3rd gen nano) although the J3 hissed slightly and some of the highs were piercing, this could have been the music loaded to it though. The biggest downfall of the C2 to me was the lack of next/prev track controls on the side. They both have external volume that goes up/down 1 step with each push. Lots of steps, so fine control is doable. The C2 is thicker, but waaay smaller. After using my ipods, they both felt really light and I would be a bit worried about breaking them....but its hard to tell how well something is made until you drop it a bunch. The C2 seemed to be a bit more heavy duty, but not by a lot. The smaller screen and metallic back should help.
These players seem really similar.
Sound quality is about the same...assuming the issues I heard at the store was the music loaded(which probably was due to other reviews I have read here)
Touch controls to me were about equal, didn't really like either one that much, better than the touch, worse than the nano
external controls, both have volume, J3 has a bit more.
J3 has much better video support, watching videos on the C2 would be silly I think, but it looked like it has the capability
The C2 seems more portable, I could see my self running with the C2, but probably not the J3.
The J3 seems really light and breakable, but then its hard to tell without some fun destructive testing that I bet yodobashi wouldn't let me do...
C2 is cheaper.
Personally I am torn, if the C2 had the external controls that the J3 has I would go that route....I think both are a good choice.
Oh I let my wife listen to the C2 and even she was surprised at how nice they sounded....and she has really no interest in head-fi. Sorry for the messy post, can't think straight been chasing 3 kids through Machida(a japanese city) today.