For an mp3 player the iPod Touch has plenty of memory. If you want to play video it becomes tricky. If you don't want one, get a classic. I for one would love it. I would be able to access the internet anywhere on campus without hauling my laptop around.
When the iPhone gets some real data transfer rate (I think this is the real reason for the price drop, by the way) on the cellular network, I'll probably make the leap. For now, it's all about the iPod Touch.