There are many different iPod touches to choose from to get the specs you are looking for. There is a 16 gig, a 32 gig, and some that are bigger and smaller.
no ipod touches do, you buy your own
no games are only for ipod touches, ipod nanos, ipod nano touches, the original ipod, iphones and any other apple product with a screen (ex. not the ipod shuffle)
Totally. Games+Music+Touch screen=Awesome
no i have drooped my ipod about 600 times and it only has a very small scratch on screen.
You can set the sensativity of the screen but it is fairly sensitive to touches.
bigger screen and a camera.
yes
yes
No. Larger screen, more advanced chip, and far more features
Yes, all iPod Touches, including the 3rd generation, come with a cleaning cloth to wipe the screen with.
ipod shuffle because it is easy to lose and no screen and in 2nd place ipod classic because it is just a bigger version of the ipod nano and it is just a big screen with lots of storage and it is horrible