IMHO all this discussion is biased by the concept of "tablet" which most members of this forum are keen on.

Actually, the iPod Touch is not marketed (nor bought) as an Internet Tablet, but as a pocket gaming console. Its competitors are the PSP and the Nintendo DSi, not Nokia ITs. In this article Steve Jobs explains Apple's strategy for the iPod Touch.

And the reason of the success is that, beyond a lot of good-quality and low-price entertainment titles, the iPod Touch has also a good mobile browser, good media player capabilities, VOIP suppor through Skype or Fring, built-in PIM functions and a large number of utility and reference applications. So the real selling point of the iPod Touch is that it is the cheapest device to access iPhone OS software ecosystem.

That's why a new cellular-less Maemo device would not be a real contender to the iPod Touch, even at the same price.

So IMHO Nokia made a good move with Maemo 5 to compete in the high-end market segment first, in order to attract as many professional software developers as possible. If Maemo does not achieve a solid software catalog, it will be crushed by iPhone and Android no matter how good the hardware Nokia will be able to produce.