Yeah, never got why they didn't catch on more before the iPod/music on phones kicked in. They wern't too expensive either - Think I paid about £100-150 for a recordable MD player to make the commute to school better (bearing in mind it was about a 45 min trip either way) back in about '98 or so. Far better than clunky portable CD players, and turned out to be great for recording lectures too.
Still got the stereo with built in MD too - Must admit it did still get a use every now and again until I recently moved, mainly if I was doing housework and I CBA lugging my laptop around. I've got a few discs with 3/4 albums or mixes on, so it was decent to have in the background. A bit moot now as every room in this house now has a alarm clock/stereo/surround sound with iPod dock.
Alas the last portable one I bought wasn't a recordable one, due to the stereo. Its a shame as I've about 70 discs (though no bloody labels, as I've whinged about before). It'd be handy to link to the laptop to record stuff rather than go though burning to disc/using stereo. It'd be pretty decent for the gym/running, rather than use my bulky old ipod or risk dropping/breaking/having stolen my iphone.
Shall miss the MD, always had a fond place in my heart