i have a 2g ipod touch 8gb. It gets the job done rather nicely... Id be lying if i said that every now n then i dont feel the want for more space. but its not too bad. I have simplify music set up (music streaming from my comp at home) so if i got a wifi connection, i get a virtually infinite amount of music. Pandora, Slacker, and iheartradio helps with that too... Of course, i have about 80 apps adding up to approximately 2 gigs of space, so thats kind of a killer right there. Basically it comes down to this, can you swing 100 more bucks? if so, then its a no brainer, get the 32gig 3rd gen (and yes, its snappier!). I bought mine for a HUGE deal that i couldnt pass up at the time, so i didnt get the 3rd gen.