Glen, thought you were supposed to caveat all posts of this type with, "I would rather eat steamed poo than buy a Mac for any reason, but..."
I KNOW not everybody likes Mac gadgets, but...
iTtunes doesn't use DRM anymore (at least for songs). You can put the MP3's wherever you want. Screen is 940x640 "Retina" display. Sound quality is as good as whatever headphones you use. The built in speakers suck, no doubt. iTunes is kind of a pain in the ass until you get used to it. Straight drag and drop would be easier, but you can essentially do that depending on what options you select within iTunes. Web browsing is decent, but certainly not laptop level. On the plus side, most major sites have mobile versions of their pages that are iPod/iPhone friendly.
My daughter has a couple of friends with the iTouches, new and old, and if you want the nifty features of the iPhone, but you don't want her to have the phone, then it's a decent piece of gear. If you're getting it primarily as an MP3 player, you might be better off with a Nano or something smaller. I think it's too big to run or work out with (though I see people do it all the time). If you want it more for the surfing, then it's ok. As a travel aid, for watching movies or listening on the plane or something, it's GREAT. If you want to play w all the aps, then it's fine for that too.
I wouldn't say it's the best thing ever, but it's neat if that's what you want.
** Oh. as for capacity - yeah, you don't NEED 32GB, but I got the 32GB iPhone, and I'm glad I did. My last iPhone was 16GB, and it would hold a heck of a lot of stuff, but after I loaded all my songs and a few movies on it, it was full. If I was on a LONG trip, I might blow through all the movies on the way out, and then have to remove and add movies before my return trip. The extra capacity allows me to overstuff the media on my phone so I don't have to ever bother with refreshing the media during the trip, which I may or may not have time for. So yeah, it IS overkill, but it HAS come in handy, at least for me. For an 8-year-old, I dunno. Guess it might mean more time between "Daddy, I need some new stuff on my iTouch!" Though if she's anything like my kid, she won't NEED your help! Lol!