If you're confused by Matsu's answers...
1. Now is a fine time to buy an iPod. They've only been updated once a year for one year... not much of a track record but I don't expect any updates soon, last update was just a few months ago. The next update will probably be in the middle of next year. I see larger sizes at the same price points. Apple would still make tons more money if they kept the 5GB version available at $200, but no way they'd do that... dropping prices? What's that? (Oh no I'm getting like Matsu!)
2. I don't know which is more popular. If you want to see them in person you could always try going to an Apple store or any other place that has them out of the box where you could test them. From going to an Apple store myself, I have to say the 20GB is noticibly thicker than the 10GB, but not annoyingly so. I wouldn't mind the extra thickness.
3. They are touch-sensitive. They feel a lot like laptop trackpads. You just glide your finder over them and they act as if you're moving the mechanical scroll wheel on the older iPods. You can't do anything like tapping the touchpad to execute any function, they're for scrolling only.
4. That's actually very close to the truth. Normally companies lie about laptop battery life, or they at least stretch the truth (a battery will last a lot longer if you're running a black screen saver with the backlight turned off and the hard drive not spinning). But with the iPod, 10 hours is normal.
Hope this helps.