I think it's worth it. The Touch is pretty cheap now compared to when it first came out, and its awesome to have in the house if you don't have an Iphone or a data plan. It's better than carrying a laptop everywhere you go for quick access to the internet.
I guess if you can afford it, go with the Iphone, but if you can't, I think the Touch isn't a bad subsitute. Although, with the Ipad coming out, maybe you should hold off if you're looking for the internet functionality.
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