Yes as I predicted few months ago, Apple is releasing new iPod Touch Gen 4 with Camera. Basically you can take all iPhone 4 functions minus the GPS and Phone feature and that will be your new iPod Touch 4.
DigiTimes Report:
'The new iPod touch will feature a 3-megapixel camera, capable of both photo and video recording, and will adopt Apple's latest A4 processor, which is also used in the iPhone 4.''
I guess it's about time iPod Touch get's updated, right?