I've owned the Rio pmp-300, Creative Nomad, Rio PMP-500, Creative Nomad 2, Creative Nomad Muvo, iRiver ifp-395t, and I have to say that the iPod mini is the best workout player I've ever had. Coupled with the armband, I have not seen a nicer combo for running or working out.
The iPod is too big and too scratchy and doesn't have a decent armband case. The flash players are too expensive to offer variety on a run.
Besides, the iPod mini can use a line out to offer me awesome sound with an amp. It is all I need considering I've lived with flash players that can only store up to 512mb. I had the iPod 15gb but it was too big for running hills, and I really didn't need 15gb.
I'm a happy camper. I could care less about the colors, but the size and durability are true selling points for me. If you're even wondering why anyone would buy it, you're probably not part of it's target audience.
I wouldn't trade mine for a dozen iPod 4G 40gbs!