I'll be buying two of these (at an educational discount), one for each of my daughters. Why? Well I've put my foot down on Limewire, and I've given them an allowance at iTunes. The iTMS and iPod package is in my opinion a way to keep them honest.
One my daughters doesn't have an iPod, or any MP3 player, the other has my old 5 gig iPod. They really don't care about storage. 1,000 tunes will be enough. What they care about is the small size, and the colors.
I hate to admit it but the smaller size appeals to me, and I'm tempted myself. I'm reaching the limit on my 30 gig iPod, and I'm wondering if size doesn't matter within a reasonable storage range of 1,000 tunes or so for mobile use.
Rumors of a $100.00 iPod were just that. Maybe next year. In the meantime the mini-iPod looks great. Apple is marketing to a segement of the population that does not yet encompass those who want dirt cheap mobile music devices.