I've believed all along that the iPod touch was way more than "just an MP3 player, which also happens to have these other features...".
It is, and in reality, has always been, a touch-driven mobile computing device in an extremely compact form-factor, which also happens to have an digital media-playing App that is very well suited to the form factor. Glad to see some others agree with me.
Back in the early days when the iPod touch was first released, the technological category that most closely resembled the iPod touch was "PDA", not "MP3 player". In my opinion, that really is still true, and has become more true through the evolution of its OS and SDK. But the term "PDA" carries so much negative baggage, that perhaps it is appropriate to redesignate the category as "compact tablet".