For me it's simply much more convenient. I had an Archos Jukebox for a few weeks in my car until I got the empeg. Sure, it did what I needed - played MP3's, and lots of them.

But, for a car stereo, here's what the empeg did better -
* Easy to read without picking up out of the changeholder each time (I'm sure I'd have crashed by now if I still had the Archos)
* Looks cool! (I'm not being facetious, it really does. Much more than a hand-held with a long wire sticking in the change tray)
* Hard drive space. Well, mine's a 60 Gig, but sure is nice fitting ALL of my CD's onto it, instead of always missing the one I really want to hear at the time.

The ipod is designed to take to school, on a trip, etc. All things an empeg could do but isn't designed for. However for a car stereo, sure the ipod could do most of it, but it's nowhere near as good.

I think it comes down to the primary use of it.