dont know why anyone would buy an mp3 player less then at LEAST 4gigs. i'd bet money on you'd out grow it within a year and want more space.
Best value is the higher the space. because at even $100 for a 256mb player, would equal out to $8,000 for 20gigs. you say the nano is a good price... however its 4 gigs. and for just $50 more you could have a 20gig.
if you want a good MP3 player, get either an ipod or an iriver.
ipods are easily the best simply because of the addons they have for them. you can find almost anything for your ipod... full car integration, stands, clock radios, they have jackets with ipod plugs and pockets made for it in them or gloves with remotes for the ipod built in. the addons are endless while most other players you'll be lucky to find a handfull of addons.
i'd say (ahem, for you*) irivers are second place, great sound. good size, color screens, reliable. comes in many differnet types/colors.
if your absolutly determined to get one ultra small with less storage, you can check out the iriver ultra portable players.
http://www.iriveramerica.com/prod/ultra/