I had one a few years back, the 2g iPod touch, that I eventually gave to my wife for her to use basically as a Kindle reader after I got frustrated that there was no way to look at your purchase history, and the fact that I hate Apple as a company. Well, in the local used game store, I found an iPod 4G for 70 bucks and said screw it and took the plunge.
One thing I am happier with is that there is now a purchase history in the AppStore. Thankfully my old account still works and the games I bought work still. Seem a bit zippier on the newer iPod too than on my older one.
I picked up a few old faves that I didn't get back when I originally had one, mostly Secret of Mana, Chrono Trigger, Final Fantasy Tactics, and Final Fantasy 3 (yea, I like RPGs) along with Sonic 4 and Sonic CD, Midway Arcade and Capcom Arcade to stir the pot a little. Paired with with my iControlpad with Bluetrol and it works pretty good using a controller for games meant on a touch screen.
Was a lil bummed that I only have 8 gigs of storage like on my old one. I understand they make 32 and 64 gig models too, just wish they would break their holdout on not having microSD as a storage method. The cameras are nice but kinda gimmicky. I wish it had vibration for the games that have force feedback programmed in.
Overall, not a bad buy for 70 bucks, though I see myself using iTunes more to switch games out with the limited storage. Wish I could just change carts instead. Still debating on that iCade I got now whether to go iPad, Android, or build something unique.