A few different options
There are a few things that I would look at. While the iPod is cool and all there are many many other options for MP3 players at lower prices. Your SD memory option is probably just going to confuse the issue. For the price of that you should be able to get many different flash memory based players.
512MB iPod shuffle-$99 (Won't play WMA, works best with iTunes, no Display)
iRivier iFP-890T 256MB--$129.99 (Won't play AAC, has display)
Equivalent SD Memory--512 MB --79.99
The other option that can be cost effective if you have wireless internet in place and that would be some of the wireless streaming options such as Roku Labs, Airport Express to name a few more common ones right now. They'll run you a bit more and if you don't have wireless internet already would cost you almost as much as the iPod...
Roku Labs M500--199.99 (would require a wireless card in your computer at least, better with a router but has a display and remote)
Airport Express---129.99(Bonus, fuctional as router, no display or remote)
Final note, remember that MP3 quality is dependant on encoding rate to some degree. Don't expect to necessarily get CD quality from a 128 Bit MP3, try some different formats before settling on one.
Hope this helps...
