The screen is definitely better than the 2.5" on the 30/80 model, I have both.
I find the wireless (which is exactly the same connection as any other wireless device, so doesn't incur any 'extra' charges) is a bit flaky - my woreless at home works fine for laptops and PCs, but the Itouch is forever dropping the connection. Overall it's OK though.
The size probably won;t bother you if you're used to a 30gb Ipod. I moved from an 80 to the 16gb touch, and quickly got used to it. You might have to sync more often, but it's no biggie.
On the other hand, the Itouch has some downsides.
The interface is amusing for about a week, then it's irritating. You can't do anything unless it's right there in your face - forget stuffing it in a pocket and moving tracks without looking.
Safari is fiddly, and again the novelty of zooming and flicking wears off pretty quickly. It also has (or had) some major bugs, with stuff like page navigation.
I find the sound isn't as good as the 5g, but when I posted about that, I was in a minority of one, so it's either just me, or I got a duff Ipod.
The TV out doesn't work with the standard cable. you have to buy Apples $50 rip-off cable. Irritating, but hey, we're Steves little ants . . .
Overall, unless you spend a lot of time watching video on the machine itself, I don't really think it's worth the money. I would add that I have a Blackberry that already does a lot of what the touch has, so I'm not as knocked out by stuff like Wireless internet as somebody who doesn't already have it.
Guess I'm kind of jaded with Ipods now. The Touch looked like a giant leap, but it's actually a little disappointing.
