Just wanted to jot down one thought while it's in my head.
The 4 GB iPhone costs $100 more than the 8 GB iPod. For that, you lose 4 GB, but you gain...
Many of these are very, very desirable. EDGE isn't great, but if you want to be online and aren't near a hotspot, it's your only choice. It's also what makes Maps work while you're on the road. A decent camera is also very handy to have, and once you've got that, the ability to email the pics (to flickr or *gasp* a human) built-in is great. (I barely use email on its own, but I email tons of pics from my phone.)
If you're buying a solid-state iPod, capacity isn't your main concern. There are some good reasons not to get an iPhone. But, unless you a) live in an area where you can't get an iPhone, b) really, really don't want to change cell providers, c) really, really don't want a higher phone bill, or d) really, really don't want an iPhone for some specific reason, I would really, really suggest getting an iPhone if you're seriously considering getting an iPod touch. (Yes, the official spelling has a lowercase 't.')
There are also people who hate AT&T, but I've heard horror stories about every carrier and for most people, there's not much difference.
(Part of an in-progress article on iPods, iPhones, and PDAs.)