Apple has renamed its flagship iPod calling it the iPod classic giving it a large 160GB drive, before launching a newer model that will take over the mantle as the flagship offering.

Using the same product name as HTC's smartphone, Steve Jobs announced the iPod touch, an 8mm thick iPod complete with 802.111b/g Wi-Fi connectivity and 3.5-inch touchscreen that will come in the same form factor as the iPhone, just without the phone elements.

Answering 69% of Pocket-lint readers' request for a touchscreen device, the new model will offer the same music and video features as the iPhone complete with Cover Flow, landscape mode, as well as the same user interface as the iPhone.

Complaining about issues with wireless networks and the problems of connecting to them, Jobs also confirmed that the new iPod touch would feature the company's Safari web browser, allowing people to deal with Wi-Fi hotspots and password entry. Just like the iPhone, the device will be able to allow you to play YouTube videos on the go.

Building on the Wi-Fi connectivity, the company has launched the Wi-Fi iTunes Music store, which allows you to preview songs by "tapping" the screen and then tapping again to downloading directly to the device. The songs will then be synced back to your computer when the iPod is next docked.

"It's the same store, at the same price", said Jobs to a cheering American crowd. Users will be able to search for any song in the catalogue of 6 million songs available in iTunes, however Apple will feature particular tracks to boost sales and clicks on a homepage.

Apple has said the same functionality will be coming to the Wi-Fi-enabled iPhone - an exciting development for iPhone owners to take full advantage of the connectivity options.

Taking things perhaps to the extreme, Apple has also announced that it has teamed up with Starbucks in the US to allow iPod touch users to see what songs are playing in store.

Customers will then be able to click to download the track, or skip back and see the last 10 songs played. Starbucks has said that iTunes users will be able to get free Wi-Fi access to the iTunes store rather than having to use a T-Mobile connection.

However - those hoping to nip down to a local Starbucks to try the service will have to wait up to 2 years before the coffee company says that all its Wi-Fi-enabled stores will be operational with the service.

Those looking for storage will be disappointed; the new iPod touch model will come in two configurations with 8GB and 16GB of memory - a far cry from the 160GB iPod classic.

The iPod touch will come with same dock connector as iPhone, and will be shipping worldwide this month. Apple is promising 22 hours of audio playback and 5 hours video playback from a single charge. The pricing in the US comes in at $299 for 8GB and $399 for 16GB of storage.

Back to the iPod classic, the new model will shares its looks with the new iPod nano, feature a full metal jacket and come with that previously mentioned, impressive top capacity of 160GB of memory on board.

The new drive size means users will be able to store 40,000 songs in their pocket - a far cry from the original tally of just 1000 when the iPod originally launched.

Smaller than the 5th Generation model, the new player will offer 30 hours of audio and 5 hours of video on a single charge. Prices will be $249 for the 80GB model and $349 for the 160GB model. UK prices are yet to be set.

Additional reporting by Amy-Mae Elliott.