I have an Zune 30G I got off Freecycle (had to open it up and reattach the battery cord, works like a charm) and I really love it. Very easy interface, looks great, and the sound is quite good. (I agree with Icculi, it is a pain in the ass to convert all my FLAC stuff...but you only have to do it once.)
The Ipod has terrible audio output. I listened to it with my Shure earphones, the same as I do with other players, and the sound is really unsatisfactory. The bass is lacking in depth, and the highs tend to be tinny. The best player for sound output, IME, is the Creative Zen. I really wish mine hadn't fallen in while I was washing dishes.