www.iriver.com.
I've not compared the iRiver and iPod directly, but my old Creative Zen Xtra sounded a similar quality to an iPod, and the iRiver is definitely an improvement on the Zen in terms of sound quality.
I only found out about the video support last week, and I thought the same - it's just a gimmick that won't be worth using, especially when I found out that videos can only be 11 frames per second max. But I gave it a shot anyway and it's surprisingly smooth to watch. There's no point criticising it if you've never used it, whoever said that.
Personally, I much prefer it to the iPod. The fact that it is true plug and play is a huge point - I can transfer music/work/etc to any computer anywhere without needing to install anything. The size is good for me, sound quality is excellent, video support is cool, and the EU model functions as a USB host, meaning you can transfer photos straight to it fro myour camera, which will save me a fortune in memory cards now.