Basically, the new iPod Touch is everything the iPhone should have been. I think Apple just got greedy and decided to put GSM capabilities as well into the device, the previous time around.
I'm only a tad disappointed at the storage offered. 8 & 16 GB for an internet and multimedia device? Jesus Christ.
Anyhow, I'm quite impressed at the new Wireless iTunes Store service as well. Surprisingly no one's mentioned it over here. Then again, it isn't going to make a bit of a difference to any of us in India. We don't even have the regular itunes store service. With rampant piracy in our country of 1 Billion plus people, it's a stupid move by the "number one music store in the world".