I already have an iPod touch ready for me for Christmas.
The iPod classic is a great deal if you have a huge library of music and video, but I plan to use the touch to view university classes on video, an occasional movie or t.v. programme, and work as a huge PDA and the games look good too but they're not that important.
Well, it's good enough to be a small computer and there are applications for everything with more being added every day.
Since I posted in this thread, I got my iPod touch and I've ripped some music videos and they really are nice on the machine. Besides, if you expect home quality sound from a mobile player, you're begging to be disappointed.