Link: Apple - iPod shuffle.
I gave the 1G model to my seven year old daughter for Christmas, and it's a big hit! The only problem is the ear buds; they are too large for her ears. Currently, we are using a pair of traditional headphones left over from a Walkman like device, but some Sony earbuds have been recommended to me. So we shall see.
It looks like we will be able to fit about 270 audio files on Julia's iPod. We have a variety of kids' music already loaded in iTunes as well as a few audio books. For instance, we visited NYC last summer and I compiled a playlist of New York themed songs. This playlist also included the audiobook of A Cricket in Times Square. We listened to the book together using a splitter on my iPod while traveling. Julia really loved it when we visited the real Times Square!
Anyway, my advice regarding setting up a shuffle is to think through your playlist. I arranged the playlist to sync with the shuffle so that the audiobooks come first. It was difficult for Julia to click through all her songs to get to the books with my original playlist, so I just rearranged things to have the books first.
I'm getting such a kick out of Julia with her Shuffle. She sat in her rocking chair, reading books and listening to music tonight. Occasionally, she starts singing out loud, too. At one point, she wanted to watch TV AND listen to her iPod, but I thought that was a bit much!