I don’t remember exactly, but I think the Zip’s playlist limit is either the same (1000) or maybe 1100. Note, you will want to update to the latest firmware version. The orginal firmware that came on the first Zips out of the factory were fine, but subsequent f/w updates broke the playlisting capabilities. Surprisingly, this was not discovered or reported until a few updates had already occurred. It was reported here; a few of us tested and confirmed .m3u playlists did not work (even those created under the original firmware) and to SanDisk’s credit, they quickly responded with an update to fix the issue. That update is the latest one you will find here on the forum.
If you buy a Fuze yes, it is going to be old stock and while it’s true that Li-Poly batteries will lose some of their charge even while not being used, it’s much less degradation than repeated charging and discharging. However even given that possibility, you’re still likely to get more playing time out of an old Fuze than a new Clip Zip as the player (and battery) is half the size of the Fuze.