I have both iPhone 4 and iPod Touch (2nd generation)....sometimes I think it is too much. I am probably going to end up selling the Touch because I have a little Nano that works better for the car because of the ability to change songs and stuff not looking.
My reasoning for the Touch (I found it pretty cheap on eBay) was to have a dedicated music player for my car. Yes, I know that the iPhone will work the same way, but I hate having to dig it out of the glove box when I go inside somewhere and unplugging it and all that stuff. It is much easier to have one dedicated to leave in the car.