I have both. The Mini has a much larger display (and that includes the Nexus 7), but the iPod Touch will fit easily in the bottom of a pants pocket. The iPod gets used in my car mostly, where it's connected to my touch screen stereo. It allows access to all of my music, including album art. The Mini can be used in exactly the same way, but it doesn't fit into my little convertible's center console pocket.
Both are capable of web browsing, Air Play, email, etc, but the Touch's smaller screen makes reading and typing unpleasant. If I had to choose just one, the Mini is a clear winner IF you don't need the smallest device.
The Touch's screen has the same aspect ratio as the Nexus 7, and that's fine for watching movies. The letterbox screen on both devices is much more like a phone, and requires a lot of scrolling to read web pages. The Mini shines here, with the web page friendly aspect ratio of 4:3. If you can't get an in-person look at these devices, look at a YouTube comparison between the Mini and the Nexus 7, and decide if the latter's narrow screen will suit your needs. My Touch gets very little use as a web browsing device because of its narrow screen, but works in a pinch.
Waiting for a Retina display depends on your needs. I don't think you'll, see a Retina Mini for at least two months.... at least. While the current Mini's text isn't as super sharp as an IPad with Retina, it's fine. I own a Mini, iPad 4, and MacBook Pro Retina, and I'm typing this on the Mini.
You can find several YouTube videos comparing the Mini and the iPad Touch 5G, and some are actually well done.
P.S. I use the iPod Touch for taking pictures and videos. Its small size makes picture and video taking much easier than even a small tablet, and you won't look silly doing it.
