I went through purchasing a new Classic a few months ago.
For a brand new one, it will be tough to beat that Wal-Mart price.
They had a $199 price for a short time but, like this, online only.
Best Buy, Sam's and Target all sell around $245.
Amazon surprisingly is the most expensive, around $260+ when I was looking.
I ended up buying on Cowboom (Best Buy's outlet store, basically) for about $140.
The one I ended up getting looked brand new, not a scratch on the back.
They have a liberal return policy so it might be worth a shot to check them out.
Also, Amazon Warehouse Deals have good prices.
I just couldn't see myself paying $200+ for ~5 year old tech.