Because for the technically illiterate Ipods are just easier to use.
 
Look, I won't argue that using any other MP3 player out there is just as easy. I know it is, but for other people, not you and me, it is hard as hell.
 
Take for instance my GF. She had this Nike MP3 player a few years back and when I upgraded here computer her MP3 player just stopped working. It mostly had to do with the new USB version in the motherboard, and the maker of the MP3 player just sucked about updating their firmware or software to work with newer MB BIOS and software OS. So....
 
I convince my GF to buy a new MP3 player. In fact I convince her to buy the one I owned at the time. A simple 128meg MPIO player. Atleast it was simple for me. I updated my MPIO with all the latest firmware updates to basically turn it into a storage device. Ergo all i had to do was plug it into my computer and drag and drop my MP3s. Easy peasy, right?
 
No so for my GF. For some reason her computer, or her in general, just couldn't get her MP3 player to work. When she was left to her own devices updating her MPIO player and getting it to work right was just IMPOSSIBLE. Seriously.  
 
So now she would call me all pissed and upset and basically get mad at ME because she couldn't get her MPIO to work, whereas mine works just fine. No matter what I tried to do over the phone with her I couldn't fix it.  In the end I don't know what she did to tht player but it just never worked right, and it caused me all too  much grief in the end. So, when she told me she was going to buy an Ipod deep inside I was like "Man, you really don't want to buy that piece of junk" but then that little voice in the back of head said, "Yes, it does suck, but I bet you she will rarely ever bug you about helping her to get her Ipod working!". So I then I was on the outside, "That sounds great! Go buy one honey!"
 
Lets face it... Stupid sells. I am not calling my GF stupid, she isn't but if you make something even a monkey can use people WILL buy it. And they will PAY to continue to use it.
 
Make a cool device that is flexible and gives you the freedom and choice you want, but require that person to be just a smidgen tech savy to download driver updates, firmware updates, etc... You will lose them completely and they will run screaming for the Ipod.
 
Sad but true.

it's called "idiot proofing" and nothing wrong with it.
 
I will grant you that in the hard drive Mp3 players. there are other, cheaper options besides the ipod.
 
hwoever... the look and design of the iPOd is pretty nice. most people like the sheek white / black look and the size. not a lot of other players have the size that the ipod has
 
but yes. it's simple as hell to use. and even for some tech saavvy people it's prefferable.  
 
i'm extremely tech inclined. (former IT manager) and i love the simplicity of the ipod. why must everything i have just because i'm a techie be complex and over the top. i for one appreciate being able to do something in no time without needing to memorize button combinations and keystrokes or locations
 
the iPOD is so idiot proof it's basically like walking to use for me. I love it

That's a very interesting point and its strange that given the huge number of different manufacturers in this market area most MP3 players are shipping with an interface design that was common 5 years ago when MP3 players first appeared.  
Perhaps if other players utilised iTunes this might happen? I guess the problem of royalties etc comes into play then.
 
On the flipside of the coin when I first saw an iPod I was very impressed with the slick interface and the ease of navigation but then I asked "what other stuff does it do, can you play tetris or something cos that would be cool on this screen" and the answer was no, I asked if you could change the font or the background to something else, no.  I could go on here but I think you get the idea.  There are 2 types of people that MP3 players manufacturers sell to:
 
1. I want to play music but I don't know what an ID3 tag is and all my file are kept in c: so I can find them.  This is the type of person that gets on fantastically with apple, apple design systems so this type of person doesn't need to know how a system, piece of software etc is designed in order to use it.  This is a valuable skill. With windows unless you learn how the system is designed and the basic principles that it *expects* to be true you will make a mess of things.
 
2. I want to have something cool that can do everything!! This type of person sees an MP3 player as a tool, a swiss-army knife and wants to make the most of their expensive new toy.  They will happily spend hours reading about it and figuring out what they can do with it, they've already got a library of music in a nice folder hierarchy all properly tagged and ready to go.  They also really couldn't give a s**t for nice graphics and shiny white clean designs cos they don't make the device *do* anything more, they want to run a gameboy emulator or play doom while listening.
 
So, apple can sell ad infinitum to people in group 1 but will never really interest those in group 2 until their price places them on a par with a regular hard-disk based player or fantastic new features are added.  Like a remote control.
 
Come to think of it why do ipods not have a proper in-line remote control with a screen?  They may be small but if you're jogging with it or simply in a hurry you want to keep that £200 player in your pocket while you change track or scroll through your albums or whatever.... I'm trying not to make that an "iriver is better..." gripe but both them and cowon (yes cowon, check them out if you haven't seen them, very stylish players) do remote controls.
 
So, in summation I guess I'm saying that while simple is good there are always those (myself included) who like to tinker with their purchases. How do you please both crowds?
 
laters
 
theDudeAbides

the difference dudeabides (great movie by the way) is the market size.
 
Apple is a company who's main focus has always been the everyday easy user. it has been way before the ipod. the ipod is geared at the everyday user who doesn't know how to tweak settings or manipulate their data and what not as you said. but i wouldnt expect the vast majority of the population to be that tech savvy. All apple's done is aim their product at the largest possible market they could penetrate. and those techless people bought it up. I'm a techie and i still bought it up.
 
imagine you know nothing of copying files from directories to folders to portable drives and putting them in a hierichal format. you don't know what an ID3 tag is and you dont knowabout equalizers and data trasnfer speeds or the difference between USB and Firewire.
 
now compare the ipod to some of the other players.
 
ipod. open itunes, search for tracks. plug in ipod. wait.
 
other. plug in device. create hierchal data structure. copy and paste mp3's. wait. copy and paste some more. re-organize. change id3 tags. wait. copy paste.  
 
the ipod / itunes scheme is really simple and it works. i'm not saying it's perfect. but it does a lot of GOOD things for people. I actually really like the idea of having one central location for my mp3 control like it. i'm a techie. i've got all my mp3's perfectly sorted on my drive by band / album / years / genres. and full ID3 tags created. but I love the simplicity of itunes. I wont make any argument for or against itunes fairuse and DRM. i don't have anything to do with it since all my music is bought via CD and copied to them.
 
the biggest fault i have right now with the ipod is once the files are copied to your ipod. if you accidently delete your library listing on your itunes you have to re import it. and if you do that it basically will recoppy the entire ipod back again. this is time consuming and a waste.
 
there is also absolutely no way to get the files back from your ipod. yes you can browse the mp3 files themselve. but itunes renames your files to random file names to prevent you from copying them back. this is fairly new though. my 3rd Gen ipod didnt do this. it at least saved the files exactly as i named them. Now you have nothing to go by but the ID3 information. its just a peeve i have. to me this was a make or break issue for buying the 5th gen... i didnt know it at the time i bought a 60gb ipod video.

 
Cheers, I like the movie too-- going with the flow etc.  Partial to an occasional white russian or two as well.
 
I think that the iTunes issue can be avoided, a guy at work has been reading people's iPods (to get a list of their favourite tunes) using this winamp plugin which seems to allow a greater degree of portability and doesn't tie you so tightly to that one iTunes install which could make it a pain to recover tunes etc etc.  Give it a go anyhow.  http://www.winamp.com/plugins/details.php?id=138888
 
I think that's the one, if not your old friend google can tell you I'm sure. ;-)

yuppers i'm looking into options right now for it.
 
the itunes stores the files in the same format. they're all the 320kb MP3's i've recorded. they've just garbled the filenames. the ID3 tags are still intact and even windows is displaying the appropriate file information.
 
this leads me to believe that with a software tool i could copy the files back to the computer and have the files renamed by some tool to match the id3 tag.
 
i love my ipod.. but when i bought it i never realized it had this file problem. as i said the 3rd gens' didnt do this.  
 
i'm curious to look at that replacement firmware. box something

 
Yeah, its called rockbox and its pretty useful.  I'd probably have gone for an ipod if I'd have waited a couple of months cos they've just released it for ipod. I've got a lot of tunes that aren't MP3 so its a great addition for me.  To be honest I think iPods have pretty decent screens and controls its just the software and music management that is limiting.  
With rockbox you patch a regular copy of the firmware and install that so that when your mp3 player boots it looks on the hard disk for a rockbox installation; if it finds one it boots that instead of your normal firmware.  You can hold down a key to boot the original firmware as per normal so its not too risky to install.  
I've had a good experience of it so far, its been very reliable for normal music playing- the only crashes so far are when i've attempted to play doom on my iriver which is kind of demanding! Give it a go if you have the time to try it, it organises the tunes in folders like your old 3rd gen but lets you browse ID3 tags for selecting music to play if you want.
I was hoping that tomshardware might do a feature on this as its getting to be quite mature software and seems to have a large user base but hasn't got much attention so far.  The developers are moving stupidly fast and there's been a couple of builds a day released at times.  It'd be interesting to see how it compares to the regular apple, iriver, archos etc firmwares.
 
laters
theDudeAbides

I'm viewing the rockbox site now. i'm very impressed.
 
the thing that gets me most is the ability to customize the screen.
 
the default ipod view is good. but i have a few CD titles that are really long. the screen won't scroll the album title. just the song name
 
so when i'm trying to differentiate between "Killing is my business... and business is good [Bonus Tracks]" album and "killing is my business... and Business is Good [Original]" album. it's not so easy.
 
when i get home tonight i'm going to give rockbox a whirl. i may try it here at work after lunch if i can remember where i put my damn USB cable

And for some even loading their iPod is hard...

Most people buy Ipods because  
1. that is what the guy at the store said.
2. that is what their kid wants
3. People say macs are better
4. They bought 1st gen MP3 player from Archos or the boat as I like to call it.
5. Just have money to burn.