Well, if your primary consideration is the price, your MP3 CD player + one CD-RW combo is extremely hard to beat (especially if you carry many CD-RWs around to have more music).
But that CD-RW takes longer to write than Flash and the size of the MP3 CD player is not even nowhere near a regular iPod, which is much smaller. And the iPod mini is way smaller than the regular iPod. Now, add another CD (because even at only 1GB, the iPod mini/flash would require you to compare with two CDs for your setup) and the resulting size is even worst.
I've gone through MP3 Flash 32MB, CD-MP3, iPod 3rd gen. 10GB, and I'm telling you I'd rather go back to Flash/32MB (even encoding songs at 48kbps especially for it) than CD-MP3 (at 128kbps), because the flash player is just so much easier to carry around, and updating songs is extremely fast.
A CD player is just too bulky once you're used to small flash players and iPods.