If we are judging only on its ability to play music, probably the ipod classic 160GB version. More space = more music and lossless encoding.
However, if we are comparing the best all around, I would give my vote to the 16GB iPod Touch. In addition to playing music, it gets my email, surfs the web, can be used as a remote for iTunes, can be used as a remote for my Roku soundbridge using the Slimserver interface, does video (on a decent sized screen), takes no time to load photos (unlike my Creative Zen W), has a Pandora interface, etc, etc... I would give up my 160GB player for the Touch any day of the week.