I purchased a 3rd gen, 32GB Ipod Touch (IpT) back in Dec. 2009. From my research on CNET, and online in general, I read up that the 3rd gen, 8 GB Ipod Touches (IpT) have the slower processors (and perhaps worse in other specs) compared to the 3rd gen 32 GB and 64 GB models. This may affect how certain resource heavy games, multimedia, and other types of software will run. They may not run, or as well, but those such apps should be in the minority (shouldn't affect casual users I'm sure).
Another thing is people generaly put music, pics, videos, and apps/games on their IpT. 8GB may not be enough. If buying it for casual users, then you're good. Otherwise, for the more heavy user....
most people own MP3 players, so they can be their own judege as to how much capacity they'll need.
... pics don't take up that much space....
... Videos WILL. If you like to rip alot of TV series episodes, DVD movies, or buy stuff right off of Itunes, then be prepared to trim some unneeded stuff to make room for others.
... I don't use any heavy duty apps, so can't comment on here....
... Games, I've got alot of. Over 5.5 GB of them! Many of the apps are as tiny as 5 to 30 MB. Others can be as big as 200 to 300 MB. For the large ones, they include some nicely done hit titles like Street Fighter IV. Or a Diablo clone called Dungeon Hunter. Several of those, or many more medium sized titles WILL eat up the Gigabytes. You can always delete stuff you don't play anymore, but dunno if you can backup save files though.
I'm glad I got a 32 GB version b/c I wanted that extra capacity. Many of the apps are either cheap or free. You may have to bite the bullet on some of them, but others, you can wait until they go on sale.
Amazon has a refurb here for $160.