I bought the Cowon S9 32GB for about $280 (more than my Motorola Droid) last year specifically to listen to music (FLAC files) and watch the occasional video (XviD files). It basically has the best sound quality once you purchase a decent pair of headphones. Like the headphoes that comes with any player, the Cowon's adequate.
I also use it to read digital books (e-books) that have been converted to text files. I have a Kindle to read e-books, but I don't want to care it around with me everywhere.
If you are looking to play flash games or looking for something with wifi, then the Cowon S9 is not for you.
I just wish the S9 had a microSD card slot like the Cowon J3 which came out this year.
The only other player I remember considering last year was the Samsung YP-P3 32GB player. It has been replaced by the Samsung P3 Palm Theatre Plus 32 GB MP3 Player, but I never read a review on it and it is more than what you are willing to spend.http://www.amazon.com/Samsung-Palm-Theatre-Player-Black/dp/B002RL8IDQ/ref=sr_1_4?s=electronics&ie=UTF8&qid=1288337731&sr=1-4