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I've only seen the retina display in the Apple store. I can tell it's a much nice screen than my current iPod Touch, but that in no way makes up for it's small size. I wouldn't count the screen as a positive because it will be easier to read on a larger screen, even if it has a lower resolution. What the iPod Touch has going for it is portability and price. If those are driving factors for you, then I'd go with the iPad. I've read plenty of pdfs on my 1st Gen iPod touch, and it works, but there's lots of pinching and scrolling and moving each page around. The iPad is much better.
And of course you can always wait and see what the next iPad brings, but we don't really know what that will be or even when. One rumour is a smaller iPad with a retina display. Hard to say if that would be the best of both worlds or still a compromise.
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