My stepkids both have Ipod Touches - David bought his at an airport VENDING MACHINE, in fact, coming back from visiting his grandparents in FL (their dad gives them a pretty nice allowance, and neither one spends much of it on a regular basis). They both like it, but seem to mostly use it for Itunes and little games. Although, there was that one time David was checking out Wifi connectivity and made some comment about a WSJ article on the stock market. Lori and I were both mightily amused.
I thought long and hard about getting an Iphone, but I'm pretty well married to the Verizon network (their coverage is better, and my family, except for my sister, is all on it so I can talk to them for free), and I've got a thing about being able to add or replace storage and batteries, neither of which can be done with the Iphone/Ipod. Instead, I finally took the plunge on the Motorola Droid a few weeks ago, and once I added a few apps for the things I do, I've found that I can replace both my old phone (an LG 8600, I believe it was - which Rhodey used in 'Iron Man', amusingly enough) and my PDA (an HP Ipaq 211). A $15 program called 'Documents To Go' gives me the ability to read, create, and modify Word, Excel, PDF, and Power Point documents, which I could do with the Windows Mobile versions of MS Office programs on my PDA; a $2 program lets me play movies and video clips, although I had to convert my movies from Windows Media or .MOV to MP4/Ipod format using a program I already had at home; I have several different free games, a free book reader program, Google's Android browser/email/OS setup - including their free GPS Navigation, which was one of the deciding factors for me to get this instead of one of the Windows Mobile smartphones - plus calendar, cell- or WiFi-based internet capability, and assorted other goodies. There are apparently between 10-20,000 paid or free apps in the Android Marketplace, many of which suck, but I've found plenty that are really useful and/or cool - not nearly as many as Apple's App Store, but Android hasn't been around as long, of course. Removable microSD storage up to 32GB (came with a 16GB chip already in place), user-replaceable batteries which give over a day of pretty heavy use, or probably 2-3 days of more-typical use. The docking station turns the phone into a rather nice clock with day or night screens (day's bright, night's dimmer), alarm, music, and local weather, which I find I'm liking much better than my dedicated alarm clock. I'm having a blast with it, frankly, and really like that technology has advanced enough that I can get a converged device that'll do everything I need (okay, WANT) it to do. I miss being able to write on the screen by touch, but the onscreen keyboard works much better than I'd expected and the Droid has a slide-out physical (landscape-layout) keyboard which also is easy for me to use. All in all, this is one heck of a neat toy.