What I'd want the touch to be...and I know this will always be a pipe dream...but be EXACTLY like the iPhone 4, just without the phone part. Retina display, same camera, same GPS, same gyroscope, same video recording stuff, same everything. I just don't need or want a phone. I don't want to sign away 2 years of my life and $55 bucks a month on a gadget. I know many many others need the phone part, but there are plenty of us out here that don't.
In fact, I'd wish they would do it as a cross between an iPad 3G and the iPhone 4. Same hardware as the iPhone 4...sans the phone....and make it Wife/3G with the same plan you get with the iPad 3G, where you can go month-to-month and opt-out or opt-in at any time.
Again, I'm sure this will NEVER happen because it would sell vast quantities and it's something that people would love to have....but there's always a "gotcha" when it comes to these things.