I have always like the looks and user interface of the Ipod. I have never liked the fact that it really only works with Itunes, the battery is not user replacable, and it does not have a customizable EQ. That's why I have a Zen MicroPhoto.
It will be interesting to see what Microsoft comes up with. If they get the design right, it will probably have a chance. According to
THIS article, the MS player will be compatible with Itunes.
I can see the WiFi feature becoming a hit and if they get rest of the feature set, and most importantly, the price, right they may have a winner. Even if it doesn't completely overtake the Ipod, it may give it some actual competition.