Are you going to use the iPhone 4 as a cell phone/cell data or just as wifi device? I think is the main difference. A lot depends on what you do with your touch now. Just music and videos? If so, both will perform the same, except for the slightly larger screen. If heavy gaming, then maybe the new touch has the edge. The iPhone 4 also has built in GPS (no wifi or cell required) if that is important to you.