This isn't comprehensive. It's mostly things that caught my attention or that are important to my use of the player.
The Positives:
-First, it's important not to lose sight of the primary function of any portable media player: delivering music, videos and Podcasts in an efficient way to the mobile user. The iPod Touch kicks ass as a portable music/video/Podcast player. The Touch UI is outstanding. I can't think of anything to complain about with the user interface. It's intuitive and smooth. I'm sold on the touch interface for small screen portable devices. (more on the UI later)
-The Touch connected to my wireless network with ease. I entered my password once and the Touch now recognizes my network whenever I'm home.
-As has been explained by others on this forum (Fash, etc), hacking the Touch was as easy as entering a URL into Safari. This installs an "installer" icon/app and lets you access all the other third party apps for the Touch/phone and install them with one click if you choose to. There's nothing earth shattering yet for the Touch but plenty of little apps that can be useful at times and they don't take that much room. Hacking the Touch adds lots of potential bonus usefulness from the iTouch, adding to it's value IMO. A+
-With portable video interfaces, I always set the "screen sleep" to a short duration for battery conservation. With the iTouch, I was able to set the screen sleep mode to not kick in for 10 minutes as there is a physical button located on top of the player that allows you to put the player into sleep mode instantly without stopping the audio or whatever the player is doing at the time. To re activate the screen, you hit the same button or the apps button and swipe your finger across the bottom of the screen to unlock the player. If you don't swipe your finger, the player goes right back to sleep in 5 seconds or so...this is nice as it prevents accidental button activation, but more importantly, allows you to hit a button to quickly see the time and what's playing and then let the player go back t o sleep without battery draining worries. I really like this setup. I hate having the screen go black on me if I don't touch something for a short amount of time. You might get distracted while browsing something..music, the net, etc and it would be a pain to have to reswipe/unlock to resume your activity. Sleep button: A+
-This is not the main purpose of the player, but web browsing is awesome on the Touch. You can surf regular web pages and have them still be functional due to the pinch/stretch touch UI. The first time I loaded VeeshanVault in the iTouch and used the fingers to stretch/zoom the screen was extremely cool. The Touch is powerful enough that you can drag the webpage around quickly using your finger to scroll up/down right/left, etc. A+
-I wondered about how easy it would be to type things using the little keypad. It's not bad. Not great but better than I expected. Whatever technology they're using works well. you punch away with your fat fingers and most of the time, the Touch gets it right. This is especially noticeable while surfing. When you have page displayed very small on the Touch, the links are super small but I was impressed at how well the Touch registered my fingers clicking on the various types of links on web pages. Combined with the very cool "flick" scrolling and pinch zoom/shrinking, the UI is as good as it gets for small screen interactive functionality: A (can't give everything an A+!)
-for Leopard, and iTunes, the Cover Flow is more gimmicky than anything but on the Touch, it's useful due to actually "touching" it to move things around. It feels natural to turn the Touch on it's side to have the UI rotate into landscape mode and Cover Flow move (or video mode). Scrolling through Album covers and then touching them to flip the Album over and view/select tracks is all a pleasure to do. The nice screen size helps with all of these things.
-The 3.5" screen is a big difference over the little Nano Fatty's screen. I can watch videos on the Fatty but have to have it right in front of my face. With the iTouch, I can sit it a little away from me on the table or somewhere and still be able to see the video. No dead pixels. The screen is not the best for viewing angles to the side though: B (due to viewing angles)
-The dedicated You Tube interface works well when you have access to the net. Nice that they added that as a standard feature. It works great as an easy entertainment to fill time while out and about. (need wireless access though!)
-The 16GB is going to come in handy with the added functionality of a hacked Touch. I think comics would actually be pretty readable on this thing while there is alreadd a PDF viewer in alpha testing. As expected, the flick scrolling is great for eBook reading on it. (as is the ability to rotate it to landscape if desired)
-Battery life seems OK so far. I won't be able to go half a week without recharging like I do on the Nano but so what. As long as it's good for a day or two, I'm fine.
Negatives:
-I couldn't get Newsleecher to run on it: F

-Video podcast are listed both in audio and video. I'm debating on whether this is a negative or not. For podcasts like Diggnation that are about 30-60 minutes long, I don't have time to watch the full videos most of the time. It's actually not a bad thing to be able to choose to listen to a video podcast in audio mode. I find myself running out of time and missing some video podcasts before the next week's show is available. Having the option to listen to them in Audio mode might help as I can to that more often at work than watch videos. Still, it does kind of clutter up the audio podcast section and you might listen to an Audio podcast not remembering or knowing that it's also a video (some audio podcasts randomly post videocasts from time to time) I'll leave it as a negative but not a major one at all.
-fingerprints, greasy screen. No avoiding it! It happens and sucks but it's not as bad as I thought it would be. I'd be bitching about it if it was. I do wipe my screen often. I left the original plastic cover that was on the screen when I purchased it in place. (I used scissors to cut out he place where the Apps button is because that was kind of irritating using the button through the cover) I don't feel so bad wiping the screen with the plastic film over it. Won't scratch the screen! So, touching the screen does blow but as anti-touch-where-I'm-viewing as I am, it's almost a non factor for some reason.
-The Touch comes with a little stand which works great except for one problem...the audio jack is on the bottom of the Touch so you can't use the stand in portrait mode if you have audio hooked up. Dumb. They should have placed the audio jack on the top for the Touch...don't care that other iPods have it on the bottom. Even in Cover Flow or Video modes, you need to rotate back to portrait from time to time. The stand just doesn't make sense to use which sucks because it's simple and effective otherwise. With audio, you can use cover flow to select songs, but you need to rotate to portrait mode to adjust volume, etc. I just think having the jack on the bottom was a poor design decision.
Needs:
-I bought a $20.00 clear plastic hard cover case for the Touch at Best Buy. (Brand: Griffen, called iClear). I'm very happy with the case. It covers everything except the screen but gives you a plastic protector sheet to apply to that. I'm still using the original plastic sheet cover though. The case allows for audio, USB access and access to the sleep button. The clear case is not too bulky and makes me feel much better about toting it around. I recommend getting a case or skin despite what Fash and the others prefer! : ) This clear case seems the least obtrusive/bulky. I plan on purchasing the Otter Waterproof case still for ~$40.00. Being able to have the Touch that well protected without a huge amount of added bulk appeals to me. Plus it will have cover protection as well which is nice. I hope to see one in person at Fry's later this year or early next year (they don't come out until Dec 1st) to be sure it's not too bulky and that it looks well made.
-I can't stress enough how nice it is to have a stereo Bluetooth headset to use with the Touch (or any other portable device). The little adapter that connects to the player is small enough not to interfere and fits in pockets, etc while attached to the player. Can't stand headset wires! The Logitech Bluetooth headphones I have last ~4-6 hours per charge which is plenty and have a nice range of 30 feet or so. The feel of headsets are a personal preference. These have a rubber part that hook over the ear and a bendable (adjustable) band that goes around the back/neck. The volume adjust is built into the entire right headphone (pus the top or bottom of the right earpiece to adjust volume or mute) Anyway, I'm very happy with this wireless Bluetooth headset. I hope more Stereo bluetooth headsets are on the market soon.
Summary:
The 16GB iPod Touch is an excellent portable media player. It has an outstanding interface, screen and high level of potential added usefulness from hacks. The web surfing isn't just a gimmick. With the touch controls, surfing full sized, normal web pages can be accomplished when you must from a location that doesn't have a PC available. As bad as it sounds to touch the screen you also use to view, it's not as bad as it would seem and isn't as annoying as I anticipated. (you do need to clean the screen more often due to this though)
Verdict: 9/10. Best Apple Product besides the new Apple Super Slim Keyboard. If you can afford the $389.00 for the 16GB version, I highly recommend it.