I picked up a gold iPod 4th Gen shuffle today at Walmart as it was the only color they had and since they were on sale for $46 I went for it. How apple even considers this iPod orange I do not know. CAPACITY DIFFERENCES.. 4th GEN W/O VoiceOver 2GB: 1.81GB 3rd GEN W/O VoiceOver 2GB: 1.83GB 2nd GEN 2GB: 1.87GB As you can see the software has gotten slightly larger with every generation losing some space to system files. The big downer for me is the lack of a 4GB model, file sizes are getting larger not smaller. There is no reason for apple to be dropping it back down to 2GB. Sound Quality using Sennheiser HD495s [Belkin adapter used for 3rd gen] 4th gen sounds about the same as the 3rd gen in terms of sound quality, for me it seems that the 4th doesn't handle lows as well as the 3rd gen did. The good news is the hissing and crackling problems that occur with HQ head phones on the 2nd gen is gone on the 4th gen. Colors From looking at them in person the silver one is about the only one that is really styling with the glossy/shiny finish. The rest of them have this pale look to them in real life. At certain angles they look good but overall the colors this year are a bit dissappointing. Useability 2nd gen has to win here. As others have said, the shuffle is really small this year and it is pretty tough to press the clip without pressing the buttons on the shuffle. I've found putting the index finger and middle finger on both corners of the face the most effective way to deal with the problem, but definitely would be a issue for those with bigger than average fingers. 3rd gen has no buttons, the factory buds fail from sweat, placement of buttons on buds aren't optimal for all, this one was a big fat mistake. One might consider a 4th gen over a 2nd gen if one needs support for playlists as the 2nd gen doesn't have any support for them. Playlists aren't a issue for me so I'd pick the 2nd gen for useability. Pricing As far as pricing goes I've always felt the iPod Shuffle has a premium attached to it just for being a apple product. We are in an age where there are alternatives [sansa clip] for a mere $30 that are nearly as small, hold twice the capacity, have a screen, and radio support. That being said the 4th gen is definitely the best dollar value of the shuffle family for a new shuffle. Though you might be able to find better deals for a used 2nd gen if you are looking for a simple gym companion or situations where you don't want to take your larger iPod with you. Bottomline If you're a 2nd gen user and you want some improvements in sound quality and playlist support the 4th gen is a worthy upgrade, especially if you're still using a 1GB model. If you're a 3rd gen user and hate the whole no buttons thing the 4th gen is a very worthy upgrade. If you don't mind the design of the 3rd gen then I really see no appeal to switch as the sound quality is slightly better and the 3rd gen offered the highest capacity of 4GB while the 4th is only at 2GB.