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I was on the fence about touch-screen vs key navigation and went with the Sony 350 to a good extent because of the touchscreen. My cell phones and mp3 players have been touchscreen for the past 3-4 years and I wasn't sure I could get used to navigating primarily with buttons, lol. Still I tried to use the buttons, but they were a bit stiff so I've been using the screen and haven't had any problems. I'm not sure how much more it would be worth, but it can make the difference between buying one device and another.
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