Confusing? Not really. Every single purchase decision is based on weighing pros and cons and, in most cases, making compromises. It's funny, when companies like Apple (and even Microsoft) don't offer choices, they're being dictatorial and monopolistic. When they do offer a range, they're confusing and convoluted. What's the real answer?
Of course you want an ipod Touch that stores 160GB, is still 8mm thin and has a 100-hour battery life for $150. If it were technically possible and financially feasible, Apple would love to sell it to you. But it's not, at least not yet, so Apple made some compromises in revamping their iPod line to offer something for everyone. That's how smart companies work.
The New iPods are Confusing