iPod Touch 2G here. Would have bought last year had the IPT included a decent camera.
Would have bought one this year had the IPT included a decent camera. Apple, get the pattern?
As it is, best bet is a used iPhone 4. Look for one on ebay. In response to my own post earlier in the thread (how can you be sure it's a good quality one and a good seller?), make sure that
1) The seller has all positive ratings and plenty of them.
2) Has recently sold things for several hundred dollars and gotten favorable reviews. (You don't want to be snared by someone who sells a bunch of little things, then gets 50-100 people to spend $350 on an non-existent iPhone 4.)
3) Get one that is still under Apple Care. There are a number being sold that fall in that category.
4) Only look at sales that included a return guarantee.
That's the solution folks. If Apple were smart, they'd sell the unlocked versions for about $100 less. I would rather give them my money, but when it's several hundred dollars, a used iPhone 4 makes a smart upgrade, especially to a camera-less iPod Touch!