Do I like Hi-MD? Yes, definitely. Especially since I sync-ed recorded about 9 hours worth of radio programming on Windows Audio onto my MD last week. But why I like MD over something like an iPod is purely personal preference (I like being able to archive everything on different discs). Also, coming from an old MDLP-only player, the sound is certainly a huge improvement as well.
I don't think MD will survive in the American market, it never lived. However, I think when prices come back down and it starts matching those of MP3 players, it will survive in the Japan market, where MD is still very popular (My tutor here at school saw my Hi-MD and proclaims that he wants one as well).
Hi-MD was an automatic purchase for me just because 1) I was coming to Japan, and 2) looking to buy a new MD player to replace my old 2-and-a-half year old player. Like I wrote earlier, why I'd choose MD over a MP3 player is purely personal preference to stay out of the mainstream and to archive my recordings.
I don't think I'd be able to convince anyone to buy an MD player over a MP3 unless they are looking to getting a lot of music from me or they really do want to explore the MD market because for now Hi-MD is far too new, and thus too expensive. Also, it would depend on why my friends would want an MP3 player.
Sony didn't quite treat me right, especially with the Japan-only adaptor and the software (apparently, Sony told the family-ran shop I bought it at and other stores that the software is only in Japanese). However, the shop treated me very well with the advice about software and the discount.
I don't think Sony at this point can do anything about MD awareness as MD has already had a fan base and the high price of Hi-MD isn't going to attract any new users. However, once Sony find that they can afford to lower the prices a little bit on both the hardware and software, I think this will turn some interest into actual purchases.