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Dont buy! - Updates soon!
That is the macrumors buyers guide opinion, and its quite true.
But, if you want a good deal then the refurbished iPods are cool
 
They always release new iPods in September/October. You could probably get a cheaper and brand-new-in-box current one on ebay or craigslist because a lot of users buying laptops are bundled with a iPod nano/touch. Or, alternatively, you could wait for September/October and get a next-gen one then.
 
I've got a 1st generation iPod Touch, and am eagerly waiting for the updates, in order to sell my touch and my cell phone for one of those. Hopefully they've got an iSight !! :)
 
Yeah if I was you I would wait. I have been holding out on buying an ipod touch for a couple of months now I really can't wait until september I have a good feeling about the updates to the ipods :)
 
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