This week, from NXP, we have an appnote on building an all-software MP3 player using their LPC2148 ARM7TDMI microcontroller:
Realizing an MP3 player with the LPC2148, using libmad and EFSL
To compare: this solution uses the DAC built into the LPC2148, so it gets 10 bits of resolution for one channel. Adding an external audio DAC for a couple bucks brings that to 16 bits and two channels. The LPC2148 is running about $14 at Digikey in unit quantity right now.
Compare with the popular VLSI chips: the job is done for you, but the chips run $20 from Sparkfun, and 16 Euro from VLSI directly (!). Those prices include license fees, though, but you still need another controller to interface with your storage and get the data and commands to the codec chip. So this does have some cost benefit.
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