I would get an fourth generation iPod Nano. The accelerometer and HD screen makes it well worth the $150[8gig]-$200[16gig]. I also like the size. That's why I stuck with my second gen Nano, over getting a third gen. But now I need the increased memory.
I don't think anyone needs a Touch. They are way overpriced too. I think the amount of memory is the deciding factor for mp3 devices. Nifty things such as accelerometers, Wi-Fi, and touch screens aren't at all necessary.
Also, this should be in either The Tavern, or Popular Media.