Ahhh, one of my pet peeves.
I wanted to get my daughter an iPod for Christmas but had significant problems finding one. You see, I think the new Nano is ergonomically a piece of ....
Too small, the wrong shape and without the click wheel. I wanted the previous old version, because Apple got that right to the point of near perfection. I eventually found a 16Gb refurbished one in the right colour for the price of the current model 8GB
Less is not always more, sometimes it's less and stupid, like the previous model iPod shuffle.
The reason the Classic has been pushed out of the limelight is because Apple haven't done anything significant with it. They have been so convinced there was no market and waiting for the inconvenient demand to go away - which it obviously hasn't - they thought they didn't need to do anything. Apple thought flash prices would keep dropping and they could soon offer greater capacity at reasonable prices but that didn't transpire either.
Apple really should have got the message by now, flash is too expensive, the price isn't going to drop soon and there is significant demand for greater capacity than flash can economically satisfy.
If i were Apple, I would take a Touch, add a HD and put a click wheel on the back - simples. I would buy one in a flash