Zoom H2 works really great for jam recordings. You can select 4 way recording in wav or 2 way stereo for mp3s. The best news is you can drag and drop your files into a ITunes or Win Media Player and record your own CDs.
I spent over $350 for a Sony Walkman but had to real time play it back to my PC to make CDs. Sony likes proprioritory software so I have bought my last Sony anything.
The H2 is less than $200. and is user friendly after studying the manual.