I've been a heavy Palm user for some years now. Primarily I used my Palm TX as an eBook reader. That may seem pretty specialized, but I read a lot, and the Palm gave me a large selection of books and magazines in a package that was smaller and easier to handle than a single paperback. You'd think I'd be the Kindle's target audience, except that the Kindle is larger than what I want in an eBook reader.
I had a few other applications I used regularly, like a RPN calculator and a shopping-list utility. I played a few games on it, but nothing terribly memorable. What I did not use it for was the traditional "day planner" functionality that first sold PDAs. I kept addresses in it, but rarely needed them. The TX has a wireless web browser, but I gave up on it rather quickly. It simply could not handle the vast majority of Internet pages at all, let alone gracefully.
Gradually, I talked myself into purchasing an iPod Touch. The truly functional web browser than sold the iPhone was sexy, but I didn't want to pay an iPhone's monthly fee. Sure, I have a cell phone, but I'm on an annualized prepaid plan because I spend less than $50 in air time a year, let alone $70 / month. Amazon now had a Kindle app for the iPhone / Touch, which meant I'd have a larger selection of books. The app store ads demonstrated the very large software support available for the iPhone / Touch. And Apple had decided that gaming was going to be a major focus for the Touch, which was quite different from the fringe areas that games always occupied for the Palm.
I've been using it for 3 weeks now, and I can say without question I made the right decision.
It's easier to use as an eBook reader. The Kindle reader is seamlessly integrated with Amazon, so it's trivial to get new books on the Touch, where it was a multi-step mild headache to do so with the Palm. The Touch is smaller and lighter, and the touch sensor is much more sensitive than the Palm's. The touch screen is capacitance rather than pressure based, so a light brush registers, where the Palm needed a definite tap, and frankly required the hard buttons to turn pages reliably.
My main regret in this area is that Amazon's Kindle app is so dead-set on letting me read only Amazon books. There's simply no way to transfer unprotected mobi-format books from other sources, unlike the physical Kindle device. Yes, I know this can be circumvented with Jailbreaking, but that's not available for 3rd generation Touches yet, and shouldn't really be necessary anyway. Other Touch applications that need to transfer files have found a way.
This has pushed me to using Stanza for all non-Amazon books, and I've really come it like it. It's just as seamlessly integrated with online book sources as the Kindle app, including the electronic book store I'd used upon until now, and some free sources for classic works like Feedbooks. Mobipocket, on which Kindle is based, was the best reader for the Palm, but frankly Stanza is even more polished.
The Touch really works as a web browser. I'm an information junkie. I like looking things up and chasing down stray threads. My pattern used to be that I'd think of something I wanted to know, and I'd make a mental note to look it up on the web later, and then I'd forget. Then I'd think of it again later, and I'd be annoyed that I hadn't looked earlier. Now the Touch is almost always in reach, and I simply look it up immediately. You wouldn't think the convenience factor would be that important, but in practice it's been great. It gracefully handles pages that are expecting much larger, higher-resolution displays.
It's in web browsing that the sloppiness of the human finger as a pointer is most evident. More than once I've wanted to select a specific block of text, such as in a search dialog, and found it difficult or impossible because the end of my finger is just a big, fat blob compared to a stylus or a mouse cursor. Still, I can see how the advantages of abandoning the stylus have outweighed the drawbacks.
The app store drives me a little crazy. It's great that there is so much software available, and that it's so easy to transfer to the Touch. While you can certainly transfer apps via iTunes, it's so much easier to just find it on the Touch directly and tell it to install. The problem is that it's very, very difficult to sift through that software, and that even the PC version of iTunes provides inadequate tools to search through it.
It's great that iTunes has Amazon-style user reviews, but you can't see the overall score for something on the search page, and you can't sort your search results by rating. And contrary to what I had heard, it's fairly obvious that Apple isn't acting as a draconian gatekeeper, since so much of it is, to be blunt, junk. This not to say good software doesn't exist. It's just that there's so much poor-to-iffy software hiding it.
This should be understood to be praising with faint damnation. The iPod Touch is a really slick device. It's a first-rate PDA, eBook reader, and web browsing device. And oh, it plays music, too.