I enjoy the touch, but I do have one qualm on functionality;
That is, it's inconvenient to pause when you're on the go. You have to take the touch out of your pocket (I keep mine on the inside pocket of my coat, which makes it fairly inaccessible most of the time), and actually look at the screen to pause it, unlike others where you can just feel around in your pocket to find the pause button. There are iPod compatible controllers one can buy, but it's another damn expense, and you still have to make sure that the cord provided is good quality and won't interfere with your listening experience.
I'm the type of person who cannot miss any one part of a song and still enjoy it fully. Besides, with larger headphones, you can't keep one earphone in, you have to take the whole damn set off your head in order to talk to somebody-- whom you probably dislike for having interrupted you-- often about something menial.