There are better players - only if you're a fanboy or require some obscure feature. I bought Iriver 120 to provide me with optical out. Sound quality is a tad better, but only slightly. But useability? Iriver is absolutely horrenduous. Elementary things like fast forward/backward and previous/next are either flakey, don't work or don't work the same way as they work on anything else. It's hack job that would pass a school project but is inadequate for a consumer product. In the end it's all about music - finding what you want, fast and easy and without hassle. Try that with the horrible joystick instead of the wheel. Not to even mention the software to make the database - never mind the complexity, iPod was no better before windows itunes, one had to figure out what to do but at least there was ephpod and it was free - iRiver alternatives cost $$$ for something that should be included. And the list goes on and on.
I haven't had a chance to try other players (Canada is a wasteland, there's only iPod, and iRiver only appeared two-three months ago) but I imagine their navigation works better. Still, I have little doubt that iPod is the king when it comes to interface, and from my experience with it, sound is great even if you could find marginally better stuff.
In the end, iPod was designed to be used. Lots of other stuff was designed either to be gadgets (by techies, so the thing is considered a saleable product as soon as you can't see the wires hanging out of it) or to compete with iPod (so their design focus was on areas where marketing said that iPod is weak, not on user experience). For example, I can navigate the thing while it's under my shirt on my belt if I need to. And after 2 years of using it, I really can't recall being pissed off with anything, ever since they made the browse by composer work in ephpod. It's now just one more thing I make sure is in my bag before I leave for work, and I just keep it plugged in into Firewire while at home (that obviosly doesn't seem to be bad for the battery because it still works pretty well). As someone put it well, the music is always only a few clicks away.