I'm pretty sure you CAN use rhapsody with an iPod you do not have to buy music from iTunes if you choose not to ... I personally prefer to own rather then rent but that's an apple's oranges personally preference type thing.

Also do not forget you can "rip" ( and COMPLETELY Legal I might add) any or all of the CD's you already own iTunes does this for you quite easily .

I find alot of people do not realize the being able to rip their own CD's thing.

Apple still has refurbs up ( apple.com click on store then in the bottom right hand of the store page you can find the link to the refurbs ) apple gives FULL warranties on all refurbs you can even get the extended warranty ( aka applecare) for one.

One suggestion tho ... applecare and apples general warranty do NOT cover physical damage ( dropped and broken .. gotten wet so on and so on ) I dunno how old your kids are or how responsible they are but if they are younger and/or likely to break the darn thing get them from Best Buy and get their extended coverage they will replace them even if dropped in a bucket of water.