The cheap iPod knock-off's tend to have better hardware. E.g. pretty much every nano knock-off plays movies. They all have included fm, play lots of video formats, have video out etc. However in my experience, the UI sucks. The menu's are terrible, the device takes ages to boot up and lags when loading songs. Often the knock-off's use buttons rather then touch sensors etc.
Basically the knock-off's can do the more complex functions better then an iPod, but the simpler functions (playing songs, navigating menus) worse then an iPod.