Check out the Sony range of MP3/MP4 players. I got a 16GB one last year and it's ace. Sound quality far better than my kids' nanos. Largely down to the quality of the standard headphones, I suspect.
I don't have to bother with iTunes (thank goodness). The player synchs with Windows Media Player, so I just rip my CDs in MP3 format (320kbps) with that and then synch. Also plays BBCiPlayer downloads.
For downloads I use Amazon
Think I paid about £90 this time last year.