Oh, I wholly disagree in terms of a step backwards. The controls on this are entirely solid state — no clicking. 1st gen had 4 clickable buttons, and a moving scroll wheel. That is 5 potential points of failure. As the saying goes "fewer moving parts, fewer broken pieces."
I still have mine, and refurbished it a couple years back with a new HD and battery. Love the glowing buttons, too. Reminds me of the glow of a vintage stereo.