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If I were you id just use it as a remote for something, if you have no use for it there just give it away.
 
I also have an 8GB iPod touch 1G and I got a 8GB 2G with the back to school offer last year and now I use my 1G as a TomTom. I installed the app on it and bought the TomTom car kit for it and it works great. If you don't want/need to do this then you could also get a dock with a speaker and use it as an alarm clock with an app.
 
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