You have a couple of options if you want a device that supports contact synchronisation and MP3 playback. Either you go down the path of updating your PDA or think about getting a smart phone that combines PDA-like abilities and MP3 capability with phone functionality.
If you're on a tight budget, an entry-level PDA such as the AU$229 PalmOne Zire 31 supports both of these functions. If you don't have an expansion card or a set of stereo headphones, be prepared to pay extra as neither is included in the box.
Another PDA option is the AU$399 HP iPAQ rz1710. As it runs Windows Mobile 2003, it provides a familiar environment for users of Microsoft operating systems. It comes with Windows Media Player for music playback and Pocket versions of Word, Excel and Internet Explorer.
If your budget allows you to spend more, consider upgrading to a smart phone. If you are already familiar with Palm OS, swapping over to the Treo 650 should pose no problem. It syncs with your desktop PC using HotSync software and has a dedicated shortcut button on its side for MP3 playback using RealPlayer. Other smart phones that also sync with Outlook and support MP3 include the Sony Ericsson P910i, Nokia 6670 and Nokia 7610, which all use a Symbian-based OS. Windows-based devices that will also do the job include HP's iPAQ Pocket PC h6365, O2's Xda Mini, Xphone II and the Xda IIs.