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It certainly sounds like you're just unlucky enough to have a faulty unit.
There's no reason it should just shut down due to minor knocks, there should be nothing in the player that is anything like that sensitive - even a HDD wouldn't be that fragile and this thing doesn't even have one of those. Also, the problems you've described, well you can see yourself from looking round the X-series forum that no-one else has reported anything similar (at least, the sensitivity thing that is, you're not the first person to question the sound quality or suggest that the player distorts when you use the EQ).
Have the player replaced or, if you don't think you'll be able to put up with the sound quality issues, change it for something else.
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