Definitely wait. I have been without a touch screen ipod for a while now. If you really need music i would just get a cheap ipod off CL or something to last for a month. Thats what I did.
Also for the money you want to spend, after the update you will probably get double the capacity.
You'll regret a purchase of a 2nd gen today when the 3rd gen shows up. even if it doesn't have a camera built in it will still be an improvement over the current model, and likely cheaper.