I have already moved on. I purchased a FiiO X5 and one 128 G SD card (note, the iPod classic, had less than 160 GB of actual storage - more like 140
Anyways, I use doubleTwist on the Mac to sync my iTunes library.
With the latest firmware for the FiiO X5, I'm in business. That said, it's a far cry from the ease of use of the iPod. But the sound seems a bit clearer to me, with more stereo spread.
There's also Neil Young's new player - ponomusic.com - that has some promise if they can pull it off.
I think that Apple is shooting for the common denominator - the average person who streams somewhat disposable, fashion-oriented music, and after they've consumed it don't listen to it much after that. But many people who have collections of jazz, classical, or "classic rock" (many from CDs NOT AVAILABLE on iTunes) don't want to stream from the cloud, or have the format altered (if they have imported into iTunes in AIFF, the "cloud" is going to convert it to AAC or whatever).
So, if we want to continue to have our own collections, and have control over them, we must move away from Apple, which I am doing, both in players and in purchases. I probably spend 300 dollars a year buying music. That's the loss they are going to have to account for, not just the loss of the sale of a player. I plan to buy High Def files when I can, CD quality, or just Amazon quality. But Apple needs some competition, and I'll plan to support the competition.
FiiO, iBasso, Pono, and others are alternatives. And, while not as easy to use as the iPod/iTunes ecosystem, they do focus on Higher Fidelity audio components.
Rick