$199 for 1 GB??? The iPod Mini gives you 4 GB storage for only $50 more, and the regular iPod has a 20 GB drive for $50 more than that. Go figure.
I'm still not sure you can look at price as your only criteria. Sure, you can quadruple your storage for $50 more, but even an iPod Mini may not be something you bring along for your workout routine. A flash-based player is still going to be better in the anti-skip department.