I would say iPods are better than most M3P players- but probably not all. I guess it's all a matter of preference (how many songs you want to be able to have, how much you want to spend, etc.). The good thing about iPods is they come with a warranty and you can go to a store for support.
As far as where I get songs from- it depends. If I want just one particular song, I download it from the iTunes store. If I want an entire CD, I typically just buy the CD and upload it.
Good luck! I love my iPod and feel incomplete when I'm without it!
ETA: I have an iPod Nano (2nd generation)- 4 MB, I believe. I've had this particularly one since Oct. 06 and I have never filled it up!