I have an iPod Touch Gen1 and I've opted not to upgrade. The only real difference is that this newer version has volume buttons on the left top side. Plus it has a mini speaker so that you can't play games and or listen to podcast or even music (this speaker is only for very casual listening). The design is a little sleeker and of course they did drop the prices on the 8, 16 and 32gb versions, ranging from $229 to $399. The recent release of the 2.1 software basically gave all use IPT Gen 1 owners the same features as the Gen2. An example is Genius, with just a few taps, the new Genius feature creates a playlist of tracks in your library that go great together. I really like this feature and find I use it a great deal. To be honest I basically use my IPT as a PDA. It allows me to track my apointments, schedule events/meetings, receive and respond to my email, check my stocks, find out what the weather is doing and even look up phone numbers, zip codes and with Google maps it even allows me to figure out where I am and how to get where I am going. The applications available have really enhanced the useability of the IPT. Being a music nut, I really have enjoyed the AOL, Pandora applications. But those are only a couple out of about 10 that I have installed. On the weekends I track NFL and NCAA Football games with updated stats and the almost live play by play action is really sweet. Now the only draw back to all this fun, you must have a wifi connection. Fortunately for me almost everywhere I go I have a wifi connection so this device works out well in my day to day walk through life. Now if they come out with a 64g IPT gen 2 or 3, I am on it!