I have an IPOD NANO and I am still using that for my music because its alot easier to control but the Touch has become my main PDA and I mostly use it to surf,watch video and play with apps/web apps. That is plays music is a bonus but my Ipod Touch is my most used device right now. I had bought an LG ENV for my verizon account a month earlier and i only use the Vcast when Im driving in the car. I hardly touch it at home unless i have a phone call to make. My Ipod Touch is my most used device right now over my cell phone,Nano and Xbox 360.
im exactly like you the nano is small enuff and easy to carry around, and the easeness of switching songs etc. when in my pocket really helps i just use my touch for movies, getting wifi and searching
Now that I have the calendar fully functional and all the phone apps plus others loaded.....this is the best damn gadget I have ever owned. It is now a dream machine....browser---pda---audio-video machine----games----book reader... I love this damn thing