iPod: the end of cool?

Jason Fried at 37 Signals (creators of the excellent web-based collaboration software, Basecamp) posits the
question: when will the iPod honeymoon end? He muses:
"What can Apple do to ride the wave of coolness for as long as possible? Or is this product somehow immune because of its unique combination of coolness, usefulness, and stylishness?"

Of course, there are already naysayers; there are even those who have gone so far as to declare war on this peace-colored inanimate object. What do you all think – when everybody has an iPod, does an iPod lose its luster?
Will other companies catch up and start making worthy competitors? Or is the iTMS-iPod
end-to-end experience going to prove a very tough nut to crack?