Both are the same exact bloody thing. Each plays MP3 files, many these days can play movies, store pictures, etc..
However, the iPod Touch does have a distinct advantage over most: Near full internet access when in a wifi area. Which is totally boss. Also, there are lots of games available, many applications and so on.
Personally, I think that Ipod Touches are just bells and whistles. Maybe in 3 years when they hold 80 gigabytes I'll get one, but I have a 120 GB Zune which has a NICE screen and wireless sharing.
its all about um ipod.dude loook my ipod has been left in the car it still works.its been in the watering machine and still freakin works.man i go for ipod it so cool its like a engerizer it last long;]