Depends what you want from an iPod. Do you want one that costs you a subscription every month? Then get an iPhone. But if you want one just for playing music, get a Classic.
I have an iPhone and an iPod. Why? Cos my iPhone only contains a couple of albums (for the rare times I'm on a train or something) and is used for phone calls, texts, internet, email - all the stuff you associate with a phone.
My iPod is a 60gb iPod Video, and is used purely to carry around the majority of my music collection so I have it all in one place wherever I go. The battery on the iPod lasts longer than that of the iPhone - using an iPhone as an iPod constantly, the battery will be dead in less than a day!
So weigh up what you want. Large capacity? Don't get a touch. Long battery life? Don't get a touch. Just for music? Don't get a touch. Want loads of other features such as apps, games, internet, email (wifi only) then get a touch. Not fussed about large capacity? Get a touch.