I have had an ipod touch since last November - mostly the experience has been good.
They look beautiful and since the 2.0 upgrade their functionality is pretty good. Perhaps if you need a certain app for a reason, have a look on iTunes first. Remember that this is not an iPaq.
I have two issues. When upgrading the firmware both of ours get into a restore loop that is difficult and time expensive to get out of. The second issue is that the bookmarks are ineffective for Audible books - unless you subscribe to Audible.co.uk this will probably not affect you.
Good aspects. The battery life is still pretty good - I use it daily and proba bly charge it once or twice a week. If you use a cheap screen protector (off ebay) the screen stay bright and nice. 8Gb is plenty for me - I know what sort of music I like and tend to dump what I don't like. If you want to use it to store loads of films, buy big, possibly something far far bigger than the largest touch.
The way it displays pictures is nice - certainly scrolling through pictures is impressive for those that have not seen it before.
Apple will etch something on the back free of charge. Had I not had mine etched I would flog it and buy an Archos 605/705.
Ask any other questions!
Chris