you will struggle to find a solid state mp3 player with more memory for less money?
the old ipod's (now the ipod classic) is built around a 1.8" hard drive - the new ipod touch uses flash memory - which is a lot lot lot smaller, doesnt have moving parts so is less likely to break or wear out - but it is more expensive.
in effect in that £270 ipod touch you have 8 x 2GB CF/SD cards (most likely 4 x 4GB modules)
oh and a word of advice, Never buy a first generation apple product - wait until they've ironed out all the problems. And if you're ever thinking of buying an apple product check the rumour sites (e.g. appleinsider.com) to see if there's an imminent product release.