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Pros:
-Bright, colorful screen which is easy for me to see even in direct sunlight
-Wide selection of applications available to expand on the functionality of my device, and there is a big developer community for the iPod touch and iPhone. Big name companied like PopCap Games, EA and Namco are developing. There is an unprecedented level of innovation and just plain neat and useful applications being developed by independent devs.
-Connectivity options including WiFi and in 3.0 will be Bluetooth
-Powerful mobile PIM device
-Great media player
-Device has great design and looks very stylish
-Simplest PDA/smartphone operating system ever
-Seemingly strong screen and body
-Many fun casual and hardcore games are available for the device
Cons:
-Mine has developed several deep scratches on the screen, but I have dropped it at least 3 times. It has also developed many, many scratches on the aluminum backing.
-Battery life can be poor
-My headphone port can feel quite cheap and loose
-Mine becomes very hot whilst charging
-On screen-keyboard can be hard to use, and landscape mode is not available in all applications
-App Store should be called the Crapp Store - very hard to find the apps which are actually useful, functional or fun because of all the "Flashlight", "Lightsaber", "Beer", and "Fart" apps.
-Does not sync Notes (coming in 10.5.7 with iPhone 3.0), cannot edit iWork documents (this is a big one)
- NO CUT AND PASTE! (WORK ON THIS, APPLE!)
In december of 2008, I was frantically trying to decide which new PDA to get: an iPod touch, or an HP iPaq 111 classic. My old device was a Dell Axim x5, so I was familiar with the Windows Mobile Platform. I was also trying to decide whether my next computer sould be a Wintel or a Mac.
I really wanted my next product to tie in with my next computer, and I was buying the PDA first, so it was crunch time - I had to choose. Windows Mobile promised me a platform with tons of developers where anyone can make and publish their own program. It also promised compatibility with Windows Vista/7 and Office 2007/14. the iPod touch, on the other hand, promised unmatched ease of use, Compatibility with Mac and Windows, and a thriving closed dev community where every app would be conveniently located in one place - the App Store.
I knew If I bought the Windows Mobile device, I would be locked in with Windows because WinMo devices do not sync with Macs. (Yes, I know about MissingSync. I do not want to pay for the basic capability to sync.)
I always loved how all Apple products seemed to tie in with one another - iLife with itself, iTunes and Apple TV, Mac and iPod, Time Capsule and Mac,
I chose the iPod and the Mac, and I have to say - I couldn't be happier.
I was always really frustrated with how sluggish and complicated Windows Mobile was, and while iPod touch does slow down sometimes, It is much, much faster and way easier to use.
Unfortunately mine has developed several deep scratches on the front screen, only visible in direct sunlight but still an annoyance. I have bought several cases for it, including the Belkin folio, the LuxMo rubberized case, and hopefully soon the beautiful iSkin Touch vibes case.
My iPod has turned out to be a great devide, sepite a few flaws. My iPod touch does everything I want it to do whenever I want - perfectly. It seamlessly integrates with my shiny new Mac to provide a bump-free and easy experience for me. It manages my contacts and calendar, Plays my music and movies, checks the weather, gives me directions, lets me browse my photos, enables me to work on the go by checking old e-mails and browsing the web where there is Wi-Fi, checking Wikipedia, googling, Tweeting, checking movie times, reading books, checking RSS feeds, looking up words in the dictionary, checking my current Wi-Fi speeds, studying my Japanese, helping me go to sleep, fakes calls to get me out of stuff, plays the 32 awesome casual and hardcore games I've bought, is a dice shaker, pulls me down videos from youtube, converts currencies, translates, checks my stocks and a million other things - It is my perfect all in one device.
If only it were a phone. Oh wait, iPhone! Mabye one day...

