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Before you get overwrought, consider everything

Pros Great for music, clear screen, terrific apps, Wi Fi, battery life.
Cons Interface, one way transfer only, ITunes Store issues.
Recommended it? Yes
The Bottom Line:  A terrific media player and book reader which can be repurposed as an adequate PDA.
What's not good but absolutely great:

Nearly unlimited space for media, games, nifty apps.
WiFi
Very, very nifty apps, some of them free, which can be downloaded from the IPod Store.
A more than respectable batter life, which will keep you listening or playing for a couple of days, compared to windows devices, such as the HTC Pure smartphone, which lasts a few hours under similar use.
A better drive. The new Sanyo drive used in the 3rd generation IPods is more robust than the Toshiba used in previous models, which means your heart needn't stop if it drops.
Admirable sound quality with the ear-buds included, very good sound quality used in a good music system.
A dizzying array of music delivery systems in all price ranges from the amazing Boze (in price as well as performance..ouch) to deals on portable speakers for as little as $19. The convenience of plugging your favorite opera into your Smart Car, thus turning it into a rolling music salon is mind boggling.
Uses beyond music: picture and file storage, games, a selection of utilities too vast to mention here.
An music storage and transfer system which allows you to prioritize your best music, to create play lists, mark favorites, determine how much of your computer based music library you want on your IPod Unit.
An exceptional screen, which makes viewing videos almost possible.
An  interface which incorporates library management and music or media acquisition with one click.
The absence of restrictive policies such as Sony exercises with some of its newer units. If you have the CD, it's yours. You can share with friends from their computer libraries (I will revisit this issue on the minus side, however)
Wi Fi allows you to download directly to the unit. A recent Kindl app permits download of books. The IPod is a fair electronic reader, as well as a game machine and music repository.
Among the notable apps is a Skype app, which permits free telecomunication with any other Skype user in the world.
A browser and mail reader are included.
Terrific Wing nut applications like a free level (keep your pictures straight) are sprinkled among the vast seas of offerings on the IStore website.
The flexibility of the IPod also makes it possible to use the unit as a PDA with apps such as Documents to Go, HandBase (a database application which allows you to arrange your data in searchable form), the Adobe Reader and more.

What's not awful but truly irritating:

Still, it's far from perfect. For this price you might want a little more..no make that a lot.
For one thing, Apple's proprietary storage system, which keeps all information in a database, only permits one way transfer of content.
When your IPod is attached to your/a computer, the software will immediately begin a one way sync from the computer to the IPod. Should you attempt to attach it to a second computer, your current content will be deleted and replaced.
There are several second party programs which allow syncing from the IPod to the computer, but it's unclear why Apple did not make this possible from the original interface. The interface can also be set to do only manual sync, which must proceed via the ITunes software. Some users have been horrified to see their entire content disappear when transferring desktops.
The ear buds are far from comfortable for long periods of time, but the sound quality is much superior to most second party in ear buds - Sony's are disappointingly tinny. Apple will replace the buds if they are damaged.
The IPod is philosophically related to the IPhone..everything points to "the cloud". That means that, aside from your media collection, there is an assumption that you will be dealing with just about everything via the Internet. The result of this is that you date book, tasks, phone books and all the other supposedly peripheral uses for the unit are assumed to be updated via WiFi (Or AT&T's extended plan for smart phones on the IPod) so it is very difficult to synchronize with a desktop, PC or Mac. There may be some third party software out there, but everything offered on the ITunes Store stores and retrieves from the net - "The Cloud", whether Google, a Windows Server, or Yahoo. For a price Apple offers "Mobile Me," which does not help if you have no WiFi access. It is possible but awkward to set up an Outlook Sync.
Most of the sync applications are, furthermore, not directed at addresses, email and phone numbers, but at facebook friends. Much of the software offering is, in fact, directed at the teen and recently post adolescent demographic.
Apple aspires to iron control over all applications used on the IPod, all of which are sold over ITunes using the ITunes software. This is intended as a convenience, but it is as often as not an annoyance. Apples policies are fairly strict..if, for instance, you purchase a software which is lot with a computer crash, you cannot download it again.
Effecting an Internet search for a particular app generally opens Itunes on the desktop for the purchase. This can be a slow process, and is not always successful. ITunes has the unfortunate habit, as well, of informing users middle in browsing that it would like to upgrade again. (Don't let it...).
The ITunes store interface is confusing, overwhelmed with music which may not be your taste and often slow.
If you are signed in and the screen is dormant too long, you will need to restart ITunes in order to sign on again.
Narrowing search criteria for utilities is complicated and frustrating, as pop songs and war games will still come up if you are looking for list management or calculating software. None the less, the variety of software available is intoxicating. Most apps run in the .99 to $2 range, making it easy enough to go a little crazy.
Support is hard to contact, but once found, they are extremely helpful.

So?

It's not an IPhone, but a top quality music listening device with a few software determined foibles, some of which can be resolved by second party software. It's an iffy excuse for a Palm, but Palm was always an iffy excuse for a Palm. With a fair amount of work it can be partially repurposed to the task of PDA.
Many of the short comings above would be absent in an IPhone, which allows access to Web based contact books, etc everywhere. It's probably a better deal for the MySpace crowd than for people with business and practical needs in mind.
The apps are great.

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