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I would go for another Touch. The regular Kindle is a pain to use the keyboard. It's a pain to make collections. It's a pain reading eBooks in KF8 (AZW3). It's limiting on the font choices.
The Touch has the USE_ALT_FONT Easter egg that you can use to load in some fonts of your choice. There are some fonts out there (Such as my modified Charis SIL) that work very well with KF8 and don't give you that large gap between lines.
Overall, the Touch is just better for reading since you have more choices of how to set it so it suits you. The regular Kindle cannot do that and you are stuck with Amazon's way of doing it.
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