I have imagined a little add on that would plug into the dock connecter that would work with a sim card, have a small speaker and a microphone, the form factor would be like
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imagine the touch fitting in the middle, you could add a thin battery to the part that goes along the back.
Now I agree with the sentiment that why not just buy an iphone....well for me the reason is I work in a place where you can not have a camera...and so unless apple were to make a model without one then I am out of luck.
The third party devise I mentioned above though could be made to look very nice....you could even add volume control buttons....I think the touch is already so thin that all this hardware would still make it viable....perhaps just a tad thicker and longer than the iphone. I would pay up to 200.00 for something like this.