I've been watching this thread from the start, and I've seen some interesting points on all sides of the discussion. I'm pretty impressed with the iPod Touch, but not so impressed that I think the Nokia IT line is in any immediate danger. However, I do see this as a strong challenge for Nokia to respond to, and they had better do it quick.

Apple has made some very nice moves recently, and though it's still early in the game, Nokia has some work to do (at least here in the US) to make the game interesting again.

I'd still buy an N800 (or 770 for that matter) over an iPod Touch. There's just so much potential left in these devices to just abandon them now.