Despite the availability of several "iPod killer" products from companies like Dell and Sony, the latest marketing data shows the Apple iPod has captured 92% of the portable MP3 music players with hard drives, and 65% of the overall portable player market.
What the iPod has that the other products don't is superb cross-platform music management/player software (iTunes is available for Windows and the Mac) and superb integration with the iTunes Music Store.
What is encouraging about the popularity of the iPod is that we sem to be moving beyond buying technology purely on price. The success of the iPod shows that consumers are very discriminating, and are want products that are designed well and are easy to use. The iPod delivers both.