To the surprise of many people the price of an 8GB iPod is same as that of a 16GB 3G iPhone. This indicates only two things that we are either going to see a huge drop in iPod prices or the economic department of Apple have got their calculations completely wrong.
In all comparisons the iPhone is a better device than the iPod touch, and if both are priced at same costs then why would people even think of buying an iPod they will straight away get an iPhone.