Personally, I don't think a video ipod will set the world on fire the way ipod nano does. Just as Steve Jobs said last year, video is not ready for primetime then, and I doubt it is now. Music video on portable devices is more a novelty than anything else, movies probably will require lengthy download or conversion, that it would take much fun away from viewing it. Besides, most special effects will be muted on small screens, so less fun.
I will probably pass on this rumored video ipod unless, it has at least 80GB, and cost cheap...$400 or less, then I might get it as a big music ipod/external storage combo...