Apple just announced a new iPod Touch.

It is a lower memory version of just 16gb, featuring an ultra-slim design, 4-inch Retina display, dual-core
A5 chip and Apple EarPods. This cheaper iPod Touch does not include the iSight camera or loop.

More info as it arrives.

Update : Selling for $229 , $30 more than previous old iPod which has now been discontinued.