OK, so I've had some more time to play with it. The sound is good - at least as good as my iphone. One thing I've found is the earphones you use effect the sound but that is my experiences with all phones/players. Pretty much every pair I've tried sounds different. And like my iPod/iPhone the ones that came with it sound best (surprise, surprise) even over some rather expensive pairs that I've bought.
All in all I'm pleased with the switch. The only downside I can say is the default music app in Android isn't quite as pretty as on a touch. Also the cover art icons are a little slow getting displayed.
I think the big questions is, would I go back... not a chance. I like my Galaxy S much better than my iPhone, even though it has a few kinks to work out (check the net for details). I very much like the fact that I don't have Steve Jobs telling me what I can and can't do with my device, or better yet, what app I can use to sync with it...