Well, I highly recommend the 1-Pixel Out audio plugin you’re using now. I kind of miss it, actually. You could definitely podcast with just that plugin (or another) for the player, especially if you were willing to hand-code the RSS file, which is the approach T.M. Camp uses (he was kind enough to share some podcasting advice at my request). Without doing that, I’m not sure how you’d fill the image field in iTunes.
I have found Blubrry quite easy to use so far, especially after a fiasco with the unmaintained, but once standard, Podpress. Matt Mullenweg says that they’re planning to take over development of Podpress as one of the first “core plugins” for WordPress sometime this year, and when that happens, I’ll definitely take a look at it. But I have no specific complaints about Blubrry so far.