Apple would never put that many keys in that interface, too complicated. Suggest that you lose click wheel and the other keys in the area (L/R click is redundant since you have a touchscreen), make the QWERTY set span the entire width of the iPod. The click wheel should be virtual since that was what most other mockups use. I can understand the two cameras but it kinda is overkill (pushes the limits, which Apple is known to do). I would drop either iChat or photography along with the corresponding camera. Also, the dock connector would be better on the side to go with current dock offerings.
Overall, very very very good for a WIP and for a person your age. Im just worried that this iPod would be too UMPC and would compete with current Mac products, try placing an emphasis on viewing media and instead of editing or creating them. Bluetooth I like very much, but WiFi=web browsing and that would not be practical on such a small screen.