scorpion9k, I think your risk assessment is spot on, especially because the MicroDrive spins down and parks its heads asap when not accessed. A hit that kills a spun-down MD probably damages the Axim in a very bad way, too.
The price you found at newegg is a very good one, too. $210 is great for a 3k6. At this price nothing beats the MD for value.
As far as the SanDisk 4GB CF card which you referenced goes, better cards can be found cheaper, e.g. the 4GB Kingston for $212, also at newegg.
I bought a 3k6 in May and am glad that I did, although I admit that I use it only for audio or video. Access to the MD should be infrequent to allow the MD to spin down and conserve power. If the MD is accessed often then the battery drain is significant.
If your budget allows you to spend another $19 + $6 shipping on a Dell 1100 mAh battery (
here) I'd recommend you do so. Second or third batteries will
always be useful whether you decide for MD or CF.