Apple, in an effort to reach the $199 price point, has substituted into the new 3G iPhone the cheaper, slightly lower quality iPod Touch display rather than the previously used "gold standard" iPhone LCD touch screen. Now on first glance, specs make you think that the pixel resolution is better on the iPod touches vs iPhone- 163ppi (iPod) vs 160ppi (iPhone)-- but pixels aren't the whole story. As has been well described, the iPod Touch display, while great, is noticeably worse than the iPhone display. (Anyone remember all the complaints on image quality of movies when the iPod Touches first came out? This was fixed, but a discernible difference remains.) I'm not saying the iPhone 3G is going to be a lousy display, but speaking as someone who owns both iPhone and iPod Touch, there is an absolute degradation in image quality, especially when watching video, on the iPod.