Bought one of these for my girlfriend's birthday a while back - the 20 GB version. (Note that the price on the page you link to is ex. VAT). The quality is quite impressive, although it's not going to match a good portable CD player, let alone a non-portable HiFi CD player. It has a line output (twin stereo 3.5mm jack-plugs) which definitely produces better results with an amp than the headphone output does.
It does a lot of fancy stuff like adding environmental effects or changing the speed of playback without affecting the pitch, or limiting sudden surges in volume: I can't see much use for this sort of thing, but gf thought it was quite cool.
It will also record direct from CD - it has an optical input - but I would recommend using a PC with (say) Exact Audio Copy and LAME MP3 encoder for best results.
If you want maximum quality recordings then you need to be encoding at 320 kb/s, which means 20 GB will hold about 138 hours (using Creative's rather stingy definition of a gigabyte). This obviously jumps significantly if you want to encode things at 128kb/s. (160 kb/s is considered to be roughly equivalent to a decent cassette deck). You can squeeze even more into it if you use WMA format rather than MP3s, but I don't know what the quality implications are.
If you want to spend that much you should also consider an Apple iPod.
Any other questions?