Personally I have stayed away from the whole iTunes store/iPod combo basically because of the crippling DRM issue Apple have implemented in their whole setup. I am amazed that folks have fallen for the Apple business model of selling music in this way by purchasing lossy MP4 music. I will always buy the CD, the SACD or the DVD-A, then re-encode to Linear PCM (WAV) or Apple Lossless (using iTunes) or even OGG (using Winamp) etc.

As for the iPod players, they are sure neat little players but you are again limited to which container formats you can play back in MP4 when purchasing music via the iTunes Store.

The earlier hard drive iPod Classic etc in not really preferred over the Solid State memory card such as SDHC. i.e. a removable 16GB card can be had for $30 each - enough to store around 25 albums in Red Book CD quality PCM simply because of their reliability and other issues such as the induced errors in the digital PCM stream such as jitter caused by pulling data of a noisy mechanical rotating hard drive. Buffering memory on the hard drive may not be enough when pulling of 150 MB WAV audio files. I would go with a PMP which is all solid state memory without the restrictions of the Apple iPod DRM issue, which can also take secondary external flash memory such as SDHC. Having wireless network capability is useful at home as well, as media files (audio and video) can be played from NAS devices and PCs via Windows Media player shared folders over the wireless network.

Can the iPod touch play downloaded Youtube videos for example. In many cases this method of getting the odd music track is even preferable to the iTunes store.

There is a lot of freely available music available in the higher quality OGG format (prefferable over MP3) such as

http://www.jamendo.com/en/artist/grace.valhalla

Which cannot be played on the iPod for example