I initially bought the 2nd gen Shuffle because my Nano had a bad experienced being left in my pants' pocket while in the wash (still works but doesn't hold a charge). Initially it was intended to hold me down until I could afford a "better" iPod.
The Shuffle makes you realize how little you need an actual display. While commuting or working out or doing chores around the house, it doesn't get in the way, and you don't have to look at it to go to the next track. It is also conveniently small: small enough where you barely notice it's there but big enough so that it isn't difficult to use. And it is very sturdy, so it is great if you work out with it or do any other task where it could possibly fall. But wait, that clip is there so it won't fall as easily (perfection!!!). In the event you do drop it, it is tough and can take a hit and just keep on going. Also!! It is great to use in cold weather because a) you don't have to take your gloves off to use it, and b) other iPods typically are less responsive in cold temperatures (whether click wheel, touch screen or a partially frozen hard drive on the classic).
So the Shuffle is a surprisingly great iPod. I haven't felt the need to get another (though I was gifted the 3rd gen). So if you are between iPods, the Shuffle is more than just good enough, and you may just end up hooked. Or clipped.