All I really want is that nice back camera they have on the iPhone 4. Beautiful stills and nice HD video! The new form factor, a4 processor, retina display, front facing camera - any of those additions are just icing (and sprinkles!) on the cake I am sailvating to buy in September.
The iPod touch is my favorite apple product. All the cool stuff of the iPhone without any of the phone specific problems.
That would be pretty cool
I can see in my mind's eye a combo of mini-iPad and iPhone 4 design.
A radius-beveled unibody aluminum back, with a plastic segment for antenna reception, and not the now-seen-as-problematic stainless band. but probably not 3G connectivity (which is iPhone domain, in the small form-factor. iPad has the large form-factor differentiation from iPhone.)
Main camera and flash, which another rumor claims as 5 megapixels. Secondary front-facing VGA FaceTime camera.
internal Microphone and speaker. Unless it might depend on Apple's mic-on-headphone-controls to do audio input and output... but speaker and mic onboard the device would be good to have.
Bluetooth connectivity (ear-piece, keyboard, audio output, or keyboard input, Nike shoe sensor)
It might not get GPS or Compass (but it would be cool if it did), but likely to get gyro+accelerometer system, and A4 chipset, and retina screen from iPhone 4.
That would set the stage for iPad 2, with at least one camera (possibly laptop-like iSight in the bezel, FaceTime ready), more Ram and processor speed upgrade, higher res screen (close to retina-screen, but maybe not quite so pixel-dense on a screen that large, and gyro upgrade. (and hopefully WiFi reception re-work. Apple can stand to work on their radio antenna designs, and implementations.)
With iPhone 4 on one end, and iPad on the other... iPod touch, (or iPad Nano, perhaps) could essentially combine the best of both. iPad like features, with iPhone-like pocket-size and camera functions. (also making it a competitor to Flip and other pocket cameras... plus all the other functionality of an iOS device)