I love my iPod, I have the mini, Apple doesn't make them anymore but you can still buy them. I was at MicroCenter last week and they still have about 20 of the blue minis that hold 1500 songs. You just have to call around.
I use the Belkin TuneBase when I'm in the car. it sucks for me though because you have to find a station with a weak signal but as I get closer to the city I pick up stronger signals here and there and get interference and have to keep flipping stations (on the tuner and my car radio) so it's a PITA. There's a new FM modulator I saw at Best Buy, Ice Link, it's $200 and you have to do some wiring to install it. That's the route I'm gonna go after xmas.
The whole battery issue happened last year with the minis, the batteries last now apple fixed the problem. I use mine a lot and haven't had any issues.
If you buy a nano, make sure you buy a case asap, because the they scratch really easily. I'm getting my nephews each a nano for xmas, I bought the case before I even bought the nano. Belkin has good cases, leather and sport ones.
good luck, your wife will love it.