It is "only" 4gb, but it absolutely DESTROYS the ipod.
It has a separate scroll wheel that won't get pressed in and useless when it permanently sticks on you (and can scroll at more various speeds than ipod)
It has sound recording
It has FM radio and recording
It has USER-replaceable batteries, that you can buy from Sandisk ($20 or $30, but I was pretty sure just $20 - that's direct from sandisk)
They have insane battery life - up to 24hr music
They can show pictures and can play VIDEO.
Now you go and find a Nano 4gb and it won't play video, no FM radio, no recording, and you'll have to send it back to them to replace the battery. If the battery is out of warranty it will cost you at least $50 from them for a new batter. On top of that the Nano costs you $200. Only thing Nano has is that it's slightly smaller, but this is still smaller than the mini
It's basically getting a pimped out Nano for < 1/2 price.
Oh and the selling point of iPods used to be the interface. The interface on this is just as intuitive, if not slightly better in some ways.
I own one... these things are awesome - you will not be disapointed. I bought another one on this deal for the gf for xmas. It's just better than iPod and I swore by those until I saw this.