My opinion is that you should get an Xbox. I have an ipod touch myself, they're overrated (Apart from the fact they have AMAZING battery life compared to the phone equivalents).
First some questions need to be asked before any of us can make a recommendation;
1) Do you have an MP3 player or phone that already plays music?
2) Will you use your Xbox 360 regularly or will it gather dust next to your PS3?
3) Why don't you just ask for money or get both?
You can get an Xbox (new condition, but old model) for £100 these days easy if you shop around, and you could get a second hand itouch for <£100 too. You can get the slim 360 for £150 new and get an older model itouch for £50-60. I don't know how that converts into your local currency, but i'm guessing everything is slightly more as you live in Australia.
With a cheap mp3 player you will get better battery life, and still be able to listen to the same music at the same quality as the ipod touch.
This is simply not true. If you get the wifi version and turn the wifi off, you get excellent battery life. I recently had a trip to cornwall and I charged my ipod touch before I went down (2nd gen, 8GB Wifi). I used it on the 10 hour journey on the megabus down and again on the 10 hour journey back. I used it at various points inbetween. Two to three weeks after I got back it still had half charge, despite 20+ hours of playtime and an additional 360+ hours of standby time (i.e. music paused, but the ipod had not been powered down). It had not been docked at any point either. That said, a standard ipod with a smaller screen would probably have better battery life, but as long as you minimise the time where the screen is on there is very little in it. Though if you use it for touch screen games, the battery life is severely reduced (See question 1, do you already have a decent phone? if so, skip the itouch).
, Got one but it finally broke after 25 years where the spring snapped. It was the most comfortable 19 years in my life!), and a fanatec steering wheel and clubsports(Got mine for $322. Got the GT3 and it's good. Could look into the GT2 for it works on Playstation, PC, and Xbox or the new CSR wheels!).
