Go for the creative zen. It's available in 2,4,8,16 and now in 32gb variants. It has a 2.5" screen and also boasts a extra port for a mem card plugin.
Reviews has shown that its music quality is far better than the ipod nano at present.
Or you can add 1k more and get the creative zen vision M (30gb) giving you more space and style. Its screen is 10x better than the ipod classic!