Ok, you do loose the functionality but look at what you also gain:
1. Good pricing.
2. Video playback. iPod Nano's don't do that.
3. FM radio. iPods don't do that either. You will have to buy an adaptor.
4. Customising. You can reskin/retheme most of these players. Put in your own text, change the icons etc.
5. Voice/MIC recording. I don't think the Nano's do that either.
Ok, no scroll wheel, but at least you don't have to move your thumb if you want to scroll up or down all the time. Just keep pressing the button.
iPods also can have bad batteries too, not just these MP4 players.
Hope that makes a case for the MP4 players
.