Until a couple weeks ago, I was running a 15gb 3rd-generation ipod. As a music play, it worked just fine. The new features weren't really enough to get me to upgrade, but the 80gb hard drive was. Now that I have a new one, I love the UI enhancements: better typeface, brighter screen, more lines of text and scrolling track/album names (for the long ones).
And i didn't think i'd be stoked for the video that much, but for me, it is great for "throw away" shows, like the Daily Show and Colbert Report, that don't lose much from not being on a large screen.
But as the usual upgrade dilemma goes: Would a new iPod today benefit you more than a future model would, considering there's no telling when said future model will materialize and what its feature will be?