I own a 2nd gen iPod touch, and I find that iPod touches lose battery power very quickly when surfing the web and playing games. That might be a problem if you plan to buy a touch.
The two iPods have different features, so you have to choose carefully. If you want the do-everything iPod, then get the touch, but if you like light weight, and small size, then get the nano. I find the nano pretty good actually, because it also has a small collection of simple games, and it has a video camera and radio tuner.
Here is my advice: if you want a do-everything iPod, then get an iPhone, because it gives you a few extra convenient features.