We got my nephew a sandisk one and he seems happy with it. An ipod was too much money, and we were also worried about him damaging the screen.
DH & I (& my mom) have iPods. We're happy with them. Mom has a mac, so it made sense. I got DH's mini a while ago, so when it was time for me to get one, it made sense to get what DH & my mom had. I have the 30 ipod video. I mostly use it in the car, so the physical size is fine. As for storage space, I've started putting photos and audio books on it, with no issues so far.
If you have a specific budget that may help you figure it out.