yes appar, that is correct that you need a PC to do a firmware update, however, VirtualPC for the Mac, and VMware for Linux have both proven to work reliably as an alternative. Pending the USB MSC firmware update, it should not matter which OS you are using. It is an issue with doing the update over ethernet, not the OS itself IIRC.
In reality, 'most' new Karmas should have the most recent firmware anyways, plus it only takes a couple minutes to borrow someone else's PC to do a quick update.
As far as using File Names, it is what many people are 'used' to, but in reality, you will find that most players will start going to an ID3 system as it is much more powerful in your ability to search, sort etc. As such, if you have all your music files in a set 'file' format, ie [e:\mp3s\artist\album\track number - track name.mp3] etc, there are many programs out there (
The Godfather is one of my favorites) that will use a 'common' file/folder structure and generate ID3 information based on the file/folder mask.
Coupled with the ID3 tag system, the Karma employs what is called Rio DJ, it essentially tracks your listening habits to auto-generate playlists such as "Forgotten Gems" which would be songs you haven't listened to in a long time etc.
If you are concerned about doing recordings, go with the iRiver (although I have heard that if you do 'serious' recordings it isn't "that" great, but I have also heard that it works well, so YMMV)
The iHP also includes a very nice LCD remote which the Karma does not (no remote at all, although there is a port, so should a remote appear for the Karma2, it could very well be backwards compatible). Some people consider this a deal breaker, others could care less, I think it is a 'nice' feature, but not crucial by any means. In case you couldn't tell I do have a Karma which I love, and I have taken it snowboarding and have done fine with that even without a remote.
As far as 'gimicky' things go, the Karma will mimick "VU meters" on the display, and you can also set the dock to 'pulse' to the beat of the music which is damn cool.
If you want 'oodles' of features go with the iRiver, if you are looking for the most flexibility with sound and playlists, go with the Karma.