I'd never even heard of it until reading this. I looked it up on Apples website -
http://www.apple.com/ipodshuffle/
Looks like it's $100 for the 512 mb, and 150 for the 1 GB. In my opinion - not worth it at all. Sure it looks small and portable, but check the stats - its 3.3 inches tall, .98 inches thick. Thats only .3 inches tall and .02 inches thick away from the iPod Mini, which for only 100 dollars more gives you 4 times as much space. You might as well just buy a MP3 CD player, if you only plan on holding a couple hundred songs (or less) and have the lower end budget..unless the size is an issue.
Also, the lack of viewscreen and quick navigation is a real disadvantage as well. And it looks like you can't pick exactly what song you want to listen to - it's strictly a shuffler, which I guess is why they named it that. It seems to me that that would get pretty impractical at times. Thats just my opinion, though. I can see something like this being a really nice idea if it was maybe around $60 or $70, the price of a good MP3 CD player + CDs. Basically just a stick version of a CD player.
Personally, I wouldn't buy one for myself - i'd definitly spend the extra $100 on an iPod Mini (if I didn't already have my 2nd generation iPod) or even more for the full iPod. For a gift, however, maybe it might not be such a bad idea. It'd be a nice suprise for somebody whose not expecting it and doesn't really want/need a full blown iPod.