I would say Ebay the Nomad and pick up an iPod 5 or 10. The iPod is fabulous--it is slim, sexy and sounds great. Plus the LiPoly 10+ hour battery is wonderful (however, MD beats the iPod by at least 1 order of magnitude in battery life). I encode all of the Music on my 10GB iPod at 128-320 VBR (LAME SSE 3.92 --alt-preset extreme) and the music is CD-transparent (at least for a portable). I use both the Sony MDRE888 and a pair of Grado SR125s with the iPod (I am considering ER6s, but trying to talk myself out it, as they are very pricey).
If you are worried about PC compatibility, don't. I use a PC with my iPod and works well with EphPod with MacDrive XP (although Apple just announced a native solution, so that is no longer even an issue).
Just sell the big, clunky Nomad for a 5GB iPod--you won't be sorry.