Yeah, the new iPod Touch is basically the iPhone without the phone capability. I thought about it, but it's still way too much for what amounts to a status symbol, to me. I'd rather get the "Classic iPod" (as they've renamed it) with the 160gb hard drive for $350. That's 10x more space for music for practically the same price.
I'm anal and did some calculations:
You'd be paying $1.56 per GB if you bought the 160GB Classic iPod.
You'd be paying $24.88 per GB if you bought the new 8GB iPod Nano.
You'd be paying $24.94 per GB if you bought the iPod Touch.
Supposedly, they've also improved the battery life on the Classic iPod.