It really depends on how much memory you need, which depends on what you want to use it for, but for reliability I'd go with the nano. It's the hard drive that usually fails but the nano doesn't have one (it has Flash memory). Unless you're watching freakin movies on the thing, 8GB is plenty for most people, although I will admit my older pre-video 20GB has been full for the last several years. Anyways, you can keep all you want in the iTunes library and just load what you need on the iPod.

Early iPod batteries had problems with premature failure, modern ones last a long long time, and they're replaceable at any rate.

I love the iPhone, but I'm waiting for the second generation.

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2002 E320 4-Matic
2008 Subaru Outback
2009 Subaru Forester