I agree that for "on the go" with typical headphones MP3 quality can be
passable (I always used the "Extreme" setting in Exact Audio Copy using
the Lame encoder which created variable bit rates in the 225k+ range
and pretty good sound even with my Sennheisers).
Having said that though, there are viable alternatives to MP3. My
portable player is a 20gb Rio Karma, which supports FLAC format files
(Free Lossless Audio Codec). FLAC will compress audio files to
about 60% of the full sized WAVE file, so certainly not as small as
MP3, but the resulting files are true CD quality, not "near CD", and I
can get about 50 CDs worth on the Karma at a time. It also came with a
dock that includes RCA connections to hook it up to a receiver.
It isn't as "slick" looking as an iPod, but the FLAC support was a real selling
point for me.
I also run a mini-plug to RCA connector from my PC's sound card to my
receiver so I can use my office PC as a jukebox for the family room
system which is in the next room (WinAmp has a FLAC plug in).
I've got the majority of my CDs ripped to FLAC, and I'm slowly getting
my concert CDR collection on there as well on a "as I want to listen to
a show" basis. At some point that 250gb hard drive is going to
run out of room though....I noticed yesterday that Costco is carrying a
400gb drive ;-)