I've always been an anti Apple guy because I don't like proprietary hardware or software, but recently, after a newegg promo email, I couldn't help but be curious about the new 4th g touch so I bought one last week(and another yesterday along with a Fiio E7 and a pair of Westone UM2 RC).
I figured if I paired it with a good DAC I could get good sound out of it plus have all the cool features the ipod touch has to offer. Well I did order a Fiio E7, but to my surprise the Touch sounds great on it's own using ALAC. I actually like it better than my RockBoxed Sansa clip.
It can definitely hold it's own. I guess that's why I bought another one.