If you don't need the wifi apps, and just want a great touchscreen media player, have a look at the Samsung P2. Most reviews online are out of date, as the P2 has had four major firmware updates since it came out a year ago. For $220ish you can get an 8gb P2, then update it for free to version 5.08 firmware, which gives you:
Music
Videos (16x9)
Photos
Contacts (sync with your Phone)
FM radio, RDS, and FM recording as MP3
Voice recording as MP3
Several games, including some that you can play 1:1 with other Samsung device owners.
Custom screen graphics including icons free to share and download.
World clock
Alarm
Sleep function
File browser with delete
Datacast (podcast) payback speed control
Simple calculator
And subway maps of major cities.
Bluetooth on the P2 supports 2 headsets at a time, file transfer, Mobile phone pairing, and can even be used as a wireless headset for VOIP on your PC. If your bluetooth enable cell phone is within 30 feet you can make and take calls on your P2.
I have both the Touch and the P2, and prefer the P2 for music. Video on the touch is bigger, but the P2 has better control options for video. P2's Music has a 7 band equalizer, Samsung's DNSe sound profiles, 3 user settings for sound parameters, and the ability to link a custom setting to a playlist. Photos have the same 4x zoom, although the Touch has a smoother zoom transition using two finger spread. There is a great text viewer app, and also a Text-To-Speech option within the PC application. If you're using a mac, you can put the P2 in UMS mode and simply drag/drop files onto it.