I'm leaning towards the touch. I don't really see a need for the external speakers and the mail app. You can always use safari to check your mail and for other apps to and I don't really share my mp3 player with others. Also bletooth is useless except for headphones which probably causes a decreases in sound quality. The extra storage is also better for those who watch a lot of videos. I think to have an iphone would just be a hassel since you have to worry about hacking after an update. In addition if you are just using the ipod portion of the iphone then it is better to get the touch since its thinner because it dones't have the phone hardware like the iphone plus the matte border on the touch seems more attractive (not a big deal though). All in all the touch is a better buy then a iphone hacked for ipod purposes.