What I'd like:
1. PDA features greatly improved. A To-Do list with categories (like playlists). The tasks show up on the calendar. The user can edit them, too, changing their date or marking them completed. User can even enter new items in a pinch, altho it is cumbersome.
2. Aluminum enclosure like a big mini, making it ruggeder.
3. No 'formatting as mac or pc'. Just one directory structure used by either version.
4. Software development kit allowing any developer to write programs to run on it.
Number 4 is especially important. The iPod is a closed, proprietary box with frustratingly limited characteristics. Basically, it's just a music player - for what it does today, it's far too expensive.