For those who are saying "There will not be a 199 model", put a sock in it.
Apple never raised prices (Mac Mini is one exception) and probably never will. There is no reason why Apple would turn away budget customers just because they want to "make the iPod Touch line more unified".
Infact, if the new iPod Touch (with camera) is 229, I would be the first the grab it because my current iPod Touch is worth 200 dollars, that means I will only have to shell out 20 - 30 dollars! 😉
Stop complaining, if it comes, it comes, if it doesn't, boycott Apple, which will not happen 😉