iPod Refurbished 5.5 or look for used?

This is a tricky one.
Refurbished is different from one user to another.
I bought a 80gb 5.5 in November in decent quality but it does have scratches and so far it has worked very well for a 6+ years old device with an ocasional freeze. But I paid only 70$ for it so it was a steal.

If it doesn't have a new motherboard/screen/battery/display I wouldn't consider it refurbished. These refurbished things run at around 200-250$.
Or you can get a used one and upgrade it yourself, you can find bigger batteries for less than 10$, covers and clickwheel/blackplate for less than 40$ and so on.

I want myself in your situation since I want to upgrade mine to 240GB and change its cosmetic look

refurbished items are questionable unless its coming from Apple directly, in which case its like having a new one.

Unfortunately you don't really know what components were replaced when the item got refurbished, what good is a new hard drive if the battery didn't get replaced too? I mean the battery would have to be at least 5 or 6 years old by now.