I like the scroll wheel in the current iPod because I can pause, skip and adjust volume without looking.
That would probably be lost with a touchscreen....
Unless maybe they can do something like this:
One tap makes the music pause. Two finger tap (or maybe a double tap) causes it to skip the song. Sliding your finger adjusts the volume.
Hmm... maybe it's not that practical. But if they throw in an ambient light sensor (which also adjusts the screen brightness), it would know when it's in your pocket because of the darkness. And when it knows it's in your pocket, then those controls become available so you can do them anywhere on the screen.
Of course it could get tight in a pocket, so tapping may not be possible. But maybe they could be simple gestures instead.
Again, it would know when it's in your pocket. And if it has an accelerometer in it, it can know which way is "down" regardless of what orientation it's at inside your pocket. Though I'd imagine it's always going to be with the earphone jack pointing up.
ANYway.... so... simple gestures... sliding a finger changes volume, doing a circular motion can skip a song. Sliding two fingers pauses the song.
And... going back to the "it knows which way is down" thing, it can therefore determine if it's a clockwise or counter-clockwise motion you're making. So you can even skip backwards.
Or maybe the circular motion can be used to change volume, like the click wheel. And the sides of the screen closest to the edge of the iPod are reserved for "back" and "forward" and "pause" commands.
Maybe it's too complicated, but it's an idea!