Looking on the iPod Touch refurb page from apple.com, there is an iPod Touch 16GB for 329.99 with the original software release, and one for 349.99 with the current software release. Can't you just update the software once you connect it to your computer? If not, what is the difference?
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iPod Difference between current and original iPod Touch software
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No the iPod Touch software update is a paid software upgrade that costs i believe $15-20. This software adds features to the iPod touch. If you buy the current software model you don't have to pay, but if you buy the old you will have to pay the fee for the upgraded features. You can opt not to upgrade for those features too.