I got an iPod touch about a year and a half ago for free- that is what finally did in the Karam for us (well, that and they kept breaking

). Overall, I am pretty pleased with the touch, even though it has less (music) features than the Kara did. I also got an iPod classic. I cannot stand the menuing interface and the overall feel of it, but this maybe because I really like the way the touch works. The classic feels much clunkier than the Karma did, but it's my wife's so I haven't really had a chance to get used to it.
The only real downside to the iPods for me is the approach to synchronizing where it is easy to wipe out your entire iPod if you somehow lose your original files. My hard drive crashed and it's been a real pain getting my collection restored- so much so that I haven't done and thus haven't added any new songs in over a year (yes, I'm that lazy). Still, the touch has a nice interface that works for me, and it has held up very well.
My opinion is that for
Utility: karma > touch > classic.
Synchronizing: Karam > touch == classic
Robustness: touch > classic > karma
UI ease of use: Karma == touch > classic
Sexiness: touch > all