Buy.com has the refurbished Apple 16GB iPod Touch for $270 + $0 shipping = $270 shipped. It has 802.11b/g WiFi built in, and because of that they include the Safari web browser + YouTube, complete with the functionality that you've seen on the iPhone. Battery life is 22 hours audio, 5 hours for video.
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Apple 16GB iPod Touch $270 at Buy.com
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