I received my Sony Music Clip last week. My previous portable music background includes Minidisc (MZ-R50, MZ-R90) and MP3 (Casio E-100).
I have spent hours with the Music Clip and can add some clarifications and personal opinions to Tim Russell's review. The most significant is that the Clip does support MP3 directly but as an encrypted MP3 (to prevent music piracy). There is an option when importing MP3 files to import them as OpenMG ATRAC3 files or as OpenMG MP3 files. The import to OpenMG MP3 files process is twice as fast as when converting to ATRAC3. I tried importing some (unsupported) variable bitrate MP3s. The software allowed it but the Music Clip crackles when playing these files.
The music quality of the Clip seems slightly better than the audio from my Casio E-100. The Clip equalization modes seem to add noticeably to the listening experience. I like the Jazz setting.
The headphones are similar to those included with the Sony 'R50 except that they do not fold up. They are slightly on the bright side and lack some bass compared to my E888s. However, considering that we are talking about 128kbps MP3 quality music, the headphones seem sufficient.
The battery life is about as advertised. With a NiMH AA battery, the power consumption was about 320 milliamps with a mid volume setting. I presume that the higher power consumption compared to other MP3 players is due to using software based codecs rather than a pure hardware MP3 decoder. The Sony can be upgraded.
With regard to the software, the SDMI stuff will probably affect all the major audio vendors (RCA already comforms), so this is a big annoyance, but probably unavoidable. With RIAA suing everyone, it would seem that most manufacturers will subscribe to the SDMI rather than fight lawsuits.
I plan to keep the Music Clip. I wanted something very small to carry when every pocket is already "full" or when my activity or environment will be too harsh to risk a MD player.