While not as important the following has turned out to be a nice extra... Video playback. My 5-year-old daughter loves this. (so much so I'm wonder should I have got an iPod video instead - they have much larger screens). Great for long car journeys, and it's surprisingly watchable. (I was skeptical about video playback too - the quality really isn't that bad).
The X5 is old-school in that if you want to easily navigate your collection, you really need to have it organized something like this...
I've ripped my CDs using different software over the years so they didn't all use the same ID3 tags (some were ID3v1, some ID3v2), and the X5 didn't recognize all the different tags. So I nuked the tags and retagged based on the directory structure with a bit of perl code (yeah I probably should've just used iTunes but that wouldn't have been as educational ;-).
As an aside - do any MP3 players support tagging ? Organizing an MP3 collection by tags (I mean del.icio.us tagging not ID3 tagging) would be cool. A player that lets you tag stuff as your listening to it and constructs playlists based on tags (single or combined) would be nice.http://del.icio.us/walterh/mp3