I got my iPod nearly two years ago, and instantly scratched it. The screen is super-delicate, so it's best to get a case right away. (Mine was a Christmas gift, and the iPod videos were newly released and in high demand back then, so finding a case was nearly impossible.)
Other than that, the design is very slick and has stood up relatively well. I've dropped it a few times and am generally not very careful with the thing, and it's held up with a minimum of glitching. Everything's still fully operational, and it holds a lot of music, which is good. Pretty much a must, really. It's slick and stylish, and I guess accessorizing it is pretty fun too, though a pricy venture.
Sound quality depends on how high-quality the songs you put on it are, really. And on what kind of headphones you're using, I guess; I hate earbuds, so I haven't used those and have nothing to say about whether or not they're any good.
Audio formats are limited to mp3 and Apple's proprietary .AAC format, which is kind of sad. I'd really appreciate it if I could put .OGG of FLAC files on there, but I guess that is just a pipe dream. The DRM gets fairly annoying, but not too big of a hassle.
It's pretty small and the controls are slick and easy to figure out. Nothing to complain about there.
I guess overall I like my iPod because it is pretty and functional and not too annoying. What?