I just have to add my two cents. Ever since my $500 40G iPod broke after 14 months (i didn't buy the warranty, with one minor drop and a good case), I swore i would NEVER pay that much for a hard drive ever again. At first switching over to a 1Gig Nano was VERY difficult but quickly I became used to it. I have phases of listening to the same stuff over and over again, so i didn't really need all the space anyway. I LOVE the flash iPod. It gets knocked around and dropped and i've never had a problem with it.
I will be very disappointed if the iTouch is only a hard drive and priced around $500. And I'm afraid Wi-Fi may bring up the price. If you need to be in a hot spot to use the Wi-Fi, isn't that frustrating and a waste?
I would LOVE if they introduced a Widescreen for showing off your pics/viewing videos, Touchscreen because it's cool, forward/back buttons for active people or driving, GAMEPLAY, 30/60G, Flash because it's faster and not as fragile.
30G $350
60G $450
I can't wait for tomorrow like everyone else on here.