1) Faster CPU and GPU (Basically faster hardware/better response/better graphics) Like iPhone 3Gs

2) More affordable. More space for less price.

3) Larger storage capacities (32GB/64GB)

However NOTE! All the above only applies to the 32/64GB model. If you are thinking of buying the 8GB model which has recently also featured a price drop. Well.. You can be note that you will be still getting a 2G iPod touch with...

4) Update the Software to 3.01 ( Faster response/ Some minor added features)

For those who like a light iPod for jogging, Radio and a whole lot of new added functions please don't wait. Buy the iPod Nano..

For me personally I'm disappointed with this minor upgrade. I shall wait for the next round to see if there are any updates to the iPod Touch.