I thought that I was the only one who has even considered this. MPXPLAY is the only program I've used since getting into this. It has all the features I want for dedicated mp3 playing, including crossfading. Even though my current setup is smaller and lighter than a normal desktop, I'm always looking to going smaller.
I'm currently researching the use with a mini-itx epia board. Overkill for DOS and Mpxplay, but with prices getting lower this could be a very small, very fast mp3 player that has the ability to be a full blown computer when needed.
It is also quite possible to run Windows 98 in DOS mode (no GUI). I did this on my first generation machine, and it loaded MPXPlay using a callout to a batch file from autoexec.bat. This allowed me to do a couple of things, 1) have several batch files to control how MPXPlay loaded (with or without preloading songs, another to recurse the MP3 directory to grab new songs), 2) exit MPXPlay and type WIN in order to pull up the GUI for networking (used to troubleshoot as well as trasnfer new songs onto the drive). I would imagine that it would not be difficult to set this up on an EPIA board, again, the DOS mode driver for the sound card would probably be the hardest thing to find.