Don't buy the iPod Touch now. I think the firmware update should be coming out soon and that'll probably be an extra $10 for current iTouch owners.
Also, I would suggest looking at refurbished iPods from the Apple Store. My brother bought a refurb 5th gen iPod at $80 off MSRP from Apple and it looks brand new. There were no scratches and it carried the same warranty as a brand new model.
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