I'd get the iPod touch. I upgraded from a 2nd gen 8GB Nano. The nano was nice, but I have grown very fond of being able to check my email and browse the web from my touch.
It has kept me from buying a netbook in a way. Then again, I may end up buying an iPhone because of the touch...
No problem. Another thing to think about; I do miss the how small the nano was. The touch takes up more space, although it's not thick or anything, just more space.