I bought my iPod Classic last Dec 30, 2008 and now after 10 months I finally made the switch and bought a 16gb iPod Touch. Actually, during that time the 1st generation of iPod touch was already released but it only comes in 8gb so I opted to buy the 80 gb iPod video.
Since I already have a wifi access at home, I decided that its convenient to finally switch from classic to touch. And I'm loving it!
The touch screen functionality, wifi (thus internet access), bigger screen for watching videos & gaming compensates to limited memory- compared to 80gb. And it will limit the skip in playlist because I had to really choose the songs, although 14.5 gb is still 14.5 gb.
Buying an iPod touch will not end the expenses because I had to buy a leather case, silicon and avail for a Gmask service.
I'm still in the getting to know my gadget phase and I'll have to test how long the battery will last.