(FORTUNE Magazine) – When I was in college, back in the last Ice Age, my parents gave me a wonderful birthday present: a Norelco portable reel-to-reel tape recorder. "Portable" meant an eight-pound box that swallowed eight flashlight batteries (but it did have a handle). I used it to gather songs from a dozen albums and record them on a tape. It took hours, but my car had no radio and that Norelco sounded pretty good.

Three decades later, music has gone digital: Mixes are a lot easier to make, and the results are fantastic. I can browse hundreds of CD tracks that I've converted to compressed files--known as MP3s--on my PC's hard drive. In seconds I can pick a dozen songs from different albums and use a "jukebox" program to play them. I can pop a compact disk in my computer's CD "burner" and create a mix in eight minutes. When it's time to mow the lawn, I can download an hour's worth of music into a three-ounce player.

All this digital fun nauseates the record industry, but it's legal: The music is mine to start with. What's happening online is another story. Napster's free software puts me in touch with 20 million other folks who want to share their music collections, and most of these MP3s are from artists with record deals. If I log on to Napster and spot a Barenaked Ladies track on Joe's computer in Omaha, two clicks will transfer it to my machine in Baltimore. And vice versa. Unfortunately, these transactions may violate copyright law because neither Barenaked Ladies nor their record companies approved them, and no one gets a cent.

Multiply our transaction by a billion--a conservative estimate of Napster's downloads over the last year--and you'll understand why the Recording Industry Association of America has hired enough lawyers to fill Yankee Stadium.

None of this matters to the millions who see the digital music revolution as payback for an industry that has ripped them off for years. Napster's traffic doubled in July, when it appeared that a federal judge would shut the company down (an appeals court stayed her injunction, pending arguments this month). Meanwhile, CD writers and portable MP3 players are flying off shelves.

The suits will probably dispatch Napster by Thanksgiving, but other services--Gnutella, Scour, iMesh, Freenet--are waiting to take its place. How long will the record labels continue to fight a losing war against a guerrilla army that far outnumbers them? Sony, EMI, and Universal have pledged to put at least some of their catalogs up for sale by download this fall (in a copyright-protected format, naturally). It remains to be seen whether consumers will pay for music once they've had MP3s for free.

PORTABLE AUDIO PLAYERS

Most portable audio players store MP3s and other digital music files in flash memory, so they have no moving parts. You can take one jogging and hear nary a skip or a pop.

Their main hang-up is storage. Cheaper units come with 32 megabytes--barely enough for a half-hour of near-CD quality music--and even the best peak at about an hour's worth of tunes. Buy a portable with a slot for additional memory; or, if you don't care about jogging, consider one of the new disk-based MP3 players, which hold a lot more music.

Capacity aside, look for a player that handles multiple formats. MP3 files rule the roost now, but record labels are sure to turn to newer formats (Liquid Audio, Windows Media) that protect against copying. At the very least, make sure the internal software can be upgraded. Finally, listen before you buy; some players use software to enhance sound quality--you may not like the result. Here are some of the best ones (the prices are averages we found comparison-shopping on the Web).

S3 Rio 600 The Rio started the portable craze, and this curvy new $170 model--with changeable faceplates--adds high style to a functional design. A large LCD screen and simplified controls make it easy to use. The USB interface supports PCs and Macs; formats include MP3 and Windows Media. Downside: Only 32 MB of memory. Upside: It's expandable.

Creative Nomad II MG The austere magnesium case hides one of the most sophisticated players on the market--and, at $400, one of the most expensive. Packed inside are 64 megabytes of expandable memory, a built-in FM tuner, a voice recorder, and cool EAX sound enhancements. The USB connection supports PCs and Macs; formats include MP3 and Windows Media. Cop-out: You can record music from the FM tuner, but the quality is diminished to avoid copyright hassles.

RCA Lyra RD2204 At $200, the Lyra offers plenty of bang--and quirks--for the buck. The main oddity is a parallel port interface that hooks up to a CompactFlash Card reader--an awkward way to transfer music from your PC. On the other hand, excellent audio controls (bass boost and five-band equalizer) and 64 megs of expandable memory make for great sound. Formats include MP3 and Real- Audio. Bonus: The cassette adapter lets you play the Lyra through your car radio.

Innogear MiniJam This snap-on module turns a Handspring Visor into a full-fledged MP3 player with a playlist manager and graphic equalizer. It also doubles as an e-book reader. Still, at $200 with 32 megabytes of memory (or $260 with 64 megabytes) the MiniJam costs as much as a dedicated audio player.

Sensory Science RaveMP 2300 Instead of expensive flash memory, the RaveMP 2300 uses an Iomega Clik Drive to store digital music files on tiny 40-megabyte disks costing $10 apiece. Two disks come with the $299 package, which boosts its capacity well beyond the standard memory of any flash-based player. Formats include MP3 and Windows Media. Downside: At seven ounces, the RaveMP 2300 is more than twice the weight of its competitors.

HIGH-CAPACITY AUDIO PLAYERS

Portable MP3 players (seen on the previous pages) have received the bulk of consumers' attention. But high-capacity players can be just as useful: They'll store a lot more music files and are great for the home or office.

Creative Nomad Jukebox Imagine stuffing your whole music collection (or everything you care about) into a gadget the size of a portable CD player. That's what the Nomad Jukebox, a tiny computer that holds 100 hours' worth of MP3 files on a six-gigabyte hard drive, can do. Listen with headphones or plug it into any sound system. The Jukebox includes a variable speed control, excellent playlist functions, and a voice recorder. The USB interface supports PCs and Macs. It may be a pricey $499, but right now it looks like the ultimate MP3 accessory.

AudioReQuest ARQ1 If you want to get MP3s away from your computer and into your stereo, the ARQ1 is a winner. This high-end, $800 audio component can store 320 hours of MP3 music on a 17.3-gigabyte hard drive. Better yet, a built-in CD player converts music to MP3 format without going through a PC at all. When you do hook it to a computer (there's an ethernet connection and two USB adapters), it can fetch album information from the Internet and build playlists.

EasyBuy MPTrip Discman The sleeper product of the year: It's the first portable CD player we've seen that can also handle MP3 files on computer-generated data disks. What's the big deal? Whereas an audio CD can handle 74 minutes of music, a disk full of MP3 files can play for ten hours. For $115, don't expect fancy playlist management or audio effects; what you will get is a bass boost, 50-second shock buffer, and voice memo recorder. If you burn your own CDs, this is a must. Order online at easybuy2000.com.

RemoteSolutions Personal Jukebox The PJB was the first industrial-strength portable MP3 player on the market. Like the Nomad Jukebox, it stores 100 hours of MP3 files on a six-gigabyte hard drive. It can also convert CD tracks to MP3 format without going through your PC. The PJB won't win design awards, but it does have a large, crisp LCD screen that makes it easy to build playlists. At $700, it's more expensive than the Nomad, and the USB interface supports only PCs. Look for the price to drop once the Nomad hits full production.

CD WRITERS

You need a CD writer--a.k.a. a CD-RW drive or a CD burner--to copy a CD or create mixed CDs with tracks from different sources. They come in two configurations. Internal units slip into an empty drive bay and connect to your computer's hard disk or CD controller. Most external units connect to the USB port. (If you have no USB port, look for a writer that uses the PC's parallel port.) Internal drives are cheaper, faster, and more reliable, although they're harder to install (service departments charge about $75 to do the job).

Generally, more money buys a faster drive, and it's worth it--to a point. Speed is displayed in a format like "8X/4X/32X." Each X is a multiple of the speed of the first generation of drives. The first two numbers refer to the drive's speed when it creates standard CDs and rewritable disks, respectively; the last refers to how fast it reads a CD. This particular drive writes standard CDs eight times as fast as the primordial drive and is four times as fast with rewritables. It reads data 32 times as fast as the original. Don't go overboard on write speed: Many blank CDs lose accuracy when written faster than 8X, and some older CD players choke on them.

A strong software bundle is as important as speed; good packages have programs to copy audio CDs, create data CDs from files on your hard drive, convert album tracks to MP3 files, and convert those files back to CD tracks. Adaptec's Easy CD-Creator Version 4 ($100; adaptec.com) does it all.

Iomega External USB ZipCD Easy to install, the $250 ZipCD is a good choice for people with laptops or iMacs. It's also one of the lowest-priced external writers on the market. Just don't expect performance miracles: the poky 4X/4X/6X speed rating is a limitation of the USB port. The Adaptec software is also a generation old: Upgrade it.

TDK veloCD This $250 internal drive's 8X/4X/32X rating puts it in the middle of the market, but its ability to rip tracks from CDs at a blistering 20X makes it great for converting albums to MP3.

Hewlett-Packard CD-Writer Plus 9300i HP's $260 10X/4X/32X drive lives up to the company's reputation for quality and ease of installation. The downside: skimpy software that doesn't do MP3 conversions. Upgrade the bundled Adaptec program to the latest release and you'll love it.