Ipods will never be cheap. The best thing you can do if you want one bad is to buy it off amazon (assuming your in a state that doesn't get charged tax), get free shipping, and use the 5% off coupon that's running for electronics.
I just bought a 4GB nano from Apple, with a students discount (You dont have to be a student, or even know one) and paid 229, or something close to that. The iPods scratch easily, so get a good case, I got an agent 18 case off of eBay www.agent18.com they are a hard plastic case that protects everything but the click wheel, and has a removable end cap, so you can put it in the dock.
Hey! I got an agent18 case for my 30GB 5G. I love it. Its very tough, and very thin so it doesnt add much bulk to the player. Only problem is that the case keeps it from fitting in the dock.