Ok heres my take on the Apple Ipod / Iphone thing ..
I've been running an Ipod Touch 32gb for 15 months. Its basically an Iphone without the phone. The inability to run Flash sites still drives me nuts- I don't take Ipod seriously as a web device though I would like to be able to. Sorry I don't buy all the Apple/Jobs spin on this- the device can either let me access the WWW warts and all or it can't . I don't care about business - most users would be consumer level.
Performance of the touch screen drives me nuts in humid clammy weather - it is almost unusable - sorry I don't have airconditioning. It develops this problem every now and then where the sound develops a big crackle unless i move the volume slider to zero and up again- factory resetting every now and then fixes this ( a very time consuming process when you have memory full )
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The battery is well and truly on the way out - depletes quickly and recharges quickly. I will have to buy and fit an aftermarket battery as my Gen 3 Ipod has next to no resale value now.
The other gripe is that its really hard to get it to charge from a dock unless the USB is plugged in to the computer. if I have a 3.5mm audio cable or headphones plugged in but it is not connected by USB it will fire up the music player randomly and deplete my battery. So when i have it plugged in to the lounge room stereo at forget to pull it out of the dock the battery will deplete overnight even if I have 'switched it off' as it is plugged in to audio out .
This device is far from perfect and has a number of annoying features and bugs. On the other hand i looked at a 7" screen Telstra Android device the other day for $299. I nearly smashed it after 5 minutes . The screen was laggy and I often launched icons when trying to scroll screens. Basically it was rubbish screenwise despite the Ipod clammy finger problem .
My money is still on the Ipod despite all its faults. I will upgrade next September when I've had 2 years out of it ( and give imy 32gb to some underprivelaged kid ) . I didn't need a video and camera so bad to upgrade to V4. I badly need 64gb memory - I spend hours swapping music on and off my device as it is full. Its not that I need 10 days of music - its just that when you get the feel of having so much at your finger tips - you want it all to choose from - and I am 20 gb short at the moment .
As an aside - apps - they are about 95 % gimmick for me - nifty for the first 5 minutes but mostly useless for anything in the long term ( I have 120 of them ! ) . Skype, Chess and a unit convertor are my main applications- the rest amuse me in the dog park