good call, this has been bothering me as well for how many years now?!
The thing I'm looking forward to with genius playlists, is that if I tell iTunes to just play my whole library (just click music and play, or click something in the list on coverflow), it won't mess up by mixing genres.
For those that have a library of classical and non-classical music, this is a pain. If I want to listen to some relaxing Chopin, I get Jay-Z interrupting from time to time. If you have any audiobooks, it's pretty awful as well. iTunes U podcasts also get thrown in there.
Sorry for the double post by the way. Two different tones, thought it warranted another post.
EDIT: Anyone think we might see cellular iTunes store access? Last year, Apple announced the WiFi store. Now, we've heard reports that Apple have been trying to negotiate with record labels to enable cellular access. That really would be a large announcement. Perhaps Apple could even do something like Amazon did with the Kindle and buy cellular network space for the iPod touch.
The record labels wanted higher prices for cellular downloaded songs. Apple could give them a larger market by allowing the touch to purchase on the go through something like what the Kindle has. It would create persistent access to the store, unlike anything on other music devices. No matter where you are, if you hear a song you like, you can buy it right then and there. Touch or iPhone. No other store in the world offers you access at any location, any time of day. Even online stores require you to be at a computer or have WiFi access.
Apple could pay for it by using their small profit per-song on iTunes (I think it's 30%) to pay for the data. That's great because it scales quite nicely (more songs = more data costs for Apple, but they get more money from the purchase to pay for it). It also fits in with the strategy of the iTunes store not being a business per-se, but really just being another great feature of the iPods. If they don't take the money per-song, they could take less profit per iPod touch and use that to pay for the data, hoping the costs even out. Either way, it'll give reduced margins on something, but probably create higher product volumes, making it a good choice both business-wise, and for consumers.
I'm also wondering why they made the Nano bigger. It can't be because of the bigger screen, because that's why people buy the iPod classic. Either they're retiring the classic (possible), or they've added something major. I think they found that adding something inevitably made it bigger, and that they had space for a larger screen. Or they've done something to the shuffle to make that the new choice for people who like their iPods with a dash of anorexia.