I love my Kindle Keyboard, though for me the deciding issue was that the KT cannot access the web through 3G. Yes, it's a feature that I've only really needed a couple of times. But those couple of times there was no wifi available and it saved me a lot of time and trouble. (Mapquest directions take a while to get through the slow, clunky browser, but they work, and with 3G, they work from anywhere. Including a moving car. No, I was not driving. :-)
I am often brushing small bits of fluff and such off my viewscreen; I hadn't thought about how that would interact with a KT.
It seems perfectly reasonable to me to use a Kindle for mp3s in addition to books. Some people don't have other mp3 players, or want specific music (personally I would want something with NO WORDS) to read books to. 3GB is actually plenty enough for books plus a modest selection of music; my first mp3 player held 256MB as I recall.
I have to admit the smaller form factor of the touch is attractive, and touching the screen would be easier than using the D pad, but I wanted the 3G web, and I suspect that having menus pop up every time I brushed a bit of fluff toward the edge of the screen would drive me mad. And the OP wanted the physical buttons, the easy access to the mp3 player, and the screensaver hack. Those are all legit reasons to get something other than a KT.
It's nice that there are many options.
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