At a minimum, it should cost you the GST. I don't think there would be duty, but that is just a guess. Having lived in a border town for many years the common experience was:
1) Never lie to the border officials. They are trained to detect lies. If you get caught in a lie the consequences are usually serious enough to make you wish you hadn't lied.
2) Never volunteer information. Answer the question, and nothing else. If they want to know more, they will ask.
3) Keep your answers minimalist. For e.g. When you are asked what you are bringing back, declare the MP3 player. If they want to believe its a cheap version, then don't enlighten them. If they want more details, then you can mention its a Zune.
4) They probably don't want to do the paperwork either. If you tell them up front what it is, they have no choice - its the rules. If they want to get to coffee early, then they can choose to leave it at "MP3" player. If they want to follow the rules, then they will ask more questions and you'll be OK because you did declare it.
People who brag about what they smuggled across the border are playing with fire. Once you are caught, your name is often flagged for future searches.
I knew a fellow who bought a very small portable TV, when portable TVs were still rare, and put it in the engine compartment when he crossed back from Buffalo. The agent asked what he had to declare, and my friend answered that he had a TV duct-taped to the inside of the hood. The agent thought he was joking, and passed him through. If he had looked, my friend would have been perfectly fine, and would have explained he was worried that someone might have broken into his car so he was hiding it.
Good Luck.