If you import your music as mp3's they stay mp3's.
The defalt import format is ACC but you get to choose. Unless you bought your tunes from the iTunes store, then they are ACC. You just have to burn your ACC files as AIFF(standard CD audio), then reimport them as mp3's.
The new Nano's are the smallest most portable up to 8gig for $239.
My PC friends first got hooked, when I visited them and in seconds hooked into there stereo's
Like you, I want a music player to play music, a cell phone to make calls on the road, and a real digital camera to take pictures.
I don't own a blackberry, but even my daughters have Nanos, but they were the older plastic nano's for less than $80.
iTunes shows a graph of what is loaded on you iPod, so you don't have to guess how much free space is left, and pictures are thumbnail size, along with contacts ect... is only a pencil thin line on the bar graph. it still holds over 2,000 songs, and the battery life is now over 20 hours. the quality, touch, and feel can't be beat, I do like playing the slideshow of my favorite vacation pictures to the music that I love, but you can just display album art with the song and artist info if you prefer. I shuffel my playlists so I never know what is coming up next.
My advice is to go to an Apple store and let them demo one for you. They can demo the software too.
And there is a large amount of freeware these days, I don't like to pay if I don't have to, and to top it off, Apples web site, has links to third party software.
I did give my friends Data DVD's of my entire library, but they still complain that they have to click and play a little of each song to import them from Data discs, WOW that sounds so painful, they don't even have to type one word.