We all waited for a long time for the Touch screen iPod! But that is why Apple didn't kill their best selling Classic iPod because they knew people would be furious. For those people who wanted the iPod Touch and knew that the space was gonna be small for now.
I learned the hard way when i was going from iPod to iPod all the time. My 1st one was U2 iPod, next was iPod Photo, then I had the nano and the rest was history. Through my experience's by having my ENTIRE music collection on there, I hardly listened to it all. So when the newer 1g Nano came out I was in love and went with the 2gb or 4gb, i don't remember.
But the moral of the story is I think the iPod Touch is fine, so what if it lacks less gb. That's what the Classic was made for all those people who wants their ENTIRE library in their iPod. For me I see no point in this but I won't tell another person to go the route I am going.
Because I wanted an iPhone when it launch couldn't get one due to bad credit. So i wasn't those people dropping a 1 grand for the phone and credit check. Basically, now I am able to get a contractless iPhone like iPod and even though the price dropped I still wont get one. Since I don't wanna be trapped with ATT if their service sucks in Boston area and surrounding areas.