"...The Rio Carbon, shaped like a slim wedge and weighing 3.2 ounces, uses Seagate Technology's new 1-inch, 5-gigabyte hard drive, and touts up to 20 hours of playback time on a rechargeable battery. It will cost $249."
For the simple reason that the uPod gives you 4x the storage + Nx the cool factor for a few bucks more. Sorry, wrong value equation. Better luck next time.