Costco is THE place to buy ipods. Most importantly, the have a 90 day return policy for them (they are on the special list, at least in the United States, and 100% sure on this, although one can get away with complaining at Costco and getting their way much of the time), and its usually a couple of dollars cheaper.
At one point my Costco store didn't have 16gb touches, so there may be limited selection, but at this point I'd bet they all have 16gb at least, if not 32gb. 90 days compared to Apple's 30 days plus restocking fee is a great deal, and since there are no questions asked its like you get 3 months to try it out without any risk.
If you're thinking of this, then you're a Costco member, and you know how great they are, this is no exception (I actually waited a couple of weeks to get it there instead of Best Buy).