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they are essentially the same now so the iPhone is better if you want/need the iPod and phone together, otherwise the touch is better based on its price.
 
Well the iPhone is still restricted to only 8 GB which isn't too good (especially since it doesn't have expansion card slots), but the fact that it has EDGE, although slow, it's still better than nothing when you can't get a wifi signal, so you can always stay up to date with mail and IMing and such.
 
For anyone that already had a phone, that is stuck on a contract, or doesn't want to pay 60 bucks a month, the touch is a life saver. It all comes down to 16gb vs having at least slow wireless everywhere, in my opinion iTouch just got the better bargain. Not worth the extra 20 on top of your normal phone price to have the net everywhere for me.
 
I think iPhone is still obviously better. It has a volume rocker, external speakers, scratch resistant back, and obviously the phone. I'd get it if it weren't for the expensive phone plan...
 
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