I use 192kbit & 256kbit mp3's, also use OGG. Works good. I don't know how many songs you can fit, mine is a 2GB player. I have mostly videos in mine.
Haven't had a go at dumping the firmware yet. But might get around to it soon.
I got mine for about $AUD110 delivered...1.8" screen, 2Gb, black colour.
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