So got a Rio mp3 player for my Mom last night. Hopefully this works out well. It's only 5Gb of storage, but it is all NVRAM instead of a hard drive, so their are no moving parts to break, making ideal for exercise.
Plus it's nice that you plug it in and it looks just like a USB drive so she can use it to transfer files also.
The one down side is she needs reading glasses and the screen/font is not large.