I have a long article I wrote, and have used in several questions, dividing the Pros and Cons of the Touch.
If you have lots of videos and photos, then you shouldn't run out of room on the 16GB if you don't have many songs. (there also is a 32 GB)
The Touch does so much more than the Classic, and you can easily show it off :)
So, here it is, a full list of the Pros and Cons of my iPod Touch that I've found so far :).
Take note, the classic only has Music, Videos, Photos, Contacts and Calendars. Of corse, it has a clock as well.
Hope this helps,
Louise
PROS:
You can jailbreak your iPod to have incredible features on it.
The iPod touch has WiFi, which allows you to connect to any internet connection (apart from protected ones, where you have to provide a password). It has Google Maps, so as long as you have an internet connection you can access directions, maps and so on. If you are going on a journey you can set up the directions before you leave the internet connection and the map will still be there.
Also, it has access to YouTube videos with an internet connection, it has the WiFi iTunes Music Store so you can download songs on the go. There will be Automatically synced upon connection to iTunes.It has an e-mail feature, so you can check your Yahoo, Google, .Mac and AOL e-mail Accounts on the streets (with internet).
There is weather, so long as you have an internet connection, and the latest news on Stocks.
Making notes is easy, and on the go, as well as the normal viewing of Photos, Songs and Videos.
The calculator and Clock are also handy at times. Not forgetting, the best software advancement in iPods, a version of the Safari browser for internet browsing with a connection.
The Touch also has your Contacts and Calenders.
It comes with a Solid State Hard Drive, which means that there are now no moving parts in an iPod bigger in size than the original Video (at 32GB). It's ultra-thin, light durable. It's Scratch resistant screen truly is unbelievably durable. it has a full sized screen, at about 3" diagonally. This makes videos amazing to watch.
It fits inside your old Video sock/case, so thats a plus, and the two buttons make it really simple to use. It will work with any standard pair of headphones. It also will backup the settings you have stored on it, when you connect it to iTunes.
(Edit:) The touch also has a nifty stop-watch and timer, as well as all the time-zones in the click.
CONS:
It may be all-singing and all-dancing, but it's not the cheapest model out there. In fact, the 32BG is the most expensive iPod on the market I believe. It's relatively small storage space (8GB, 16GB or 32GB) isn't really that much in comparison to the Classic (at 80GB and 160GB), and they are much cheaper.
It''s wide touch screen is durable, but the shiny back mirror isn't. It's the same as any other iPod, and without a case don't get too attached about looking at yourself in it!
Unlike the iPhone, there is not always 100% internet access available, and most networks are now locked for security.
It comes with the over-sized Apple headphones, which aren't that good anyway. and the Headphone Jack is located next to the Dock connector, which for some reason I hate. It comes without a case, another expense, and it has a strange black corner that looks rather out-of-place on the top right where the WiFi antennae is.
You have to pay for software updates, unlike anything else of Apple's iPods and iPhone.
Currently, there is no (official) way of installing Applications onto it, but that is to come in the next software version (1.1.5). There is also no microphone on it wither, so when the next version comes out and Skype Touch is undoubtedly going to be released, you will have to buy an external microphone.
(Edit:) the alarm isn't that customizable, you can't choose to play a song to wake you up. Just bad Apple preset sounds.