If you purely want an MP3 player I would suggest something cheaper....maybe an 8GB nano.
However if you want a gadget that doubles as an ipod, then the touch is for you. With built in Wifi you can connect to a router (for free) and browse the internet, go on youtube, access myspace, facebook etc. and even check your email.
Then theres the games, there are lots of free games which are good, but the best ones you will have to pay for, but when you see the quality of them, and your only paying less than £6 thats pretty good in comparison to a PSP or nintendo DS.
I got one of these over a week ago, and its worth ever penny, an amazing piece of kit. the 1 downside is that it does scratch easily on the back, so get a case!