Sony caught you hook line & sinker.
Check the quality on the playback at those settings. MD was great when I was in high school, but there've been some advancements.
I'd check out iRiver, it's like an iPod, only it costs less, isn't a pop status symbol, the battery lasts longer, plays more formats, and comes with more useful (to most people) stuff.
If you're willing to cram 8 CD's worth of music on a MD, then you'll be fine with an FM Modulator hooked up to an mp3 player. Actually, you could buy the Neuros - which already has the FM modulator built in.