The Sansa Clip is very good, but a 2nd gen Shuffle is considerably smaller.
However if you decide to get a Shuffle make sure you get a 2nd gen Shuffle, not the newer 3rd gen Shuffle. Although IMO the new 3rd gen sounds a lot better, it has issues with sweat entering the remote on the headphones.
The sweat issue with the 3rd gen Shuffle has been much debated on the Apple support forum, causing all-sorts of issues from sudden increases in volume; to stopping the player working full stop.
However don't forget the iPod Nano and the Nike + iPod Sport Kit, this could well be a match made in heaven if your doing a lot of running - But it's not what I'd call a cheap option.
As a wildcard why not look at the Sony NWZ-W202, but be warning I think it too also suffers from sweat issues. All things considered, the 2nd gen shuffle is probably the best choice size wise, especially as your already using iTunes.
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