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(Pocket-lint) - With the recent refresh of Apple's iPod range, the iPod touch has undoubtedly asserted itself at the top of the tree. With the nano stripping down, there appears to be a hole in the middle of what was once Apple's MP3 player offering. The iPod touch is safe though and you can't help thinking that this is the one that Apple wants you to buy.

The business reasoning would be clear. All the hard work that has gone into refining the iOS interface is demonstrated here and Apple benefit not only from sales of music through the iTunes Store, but also their cut of app sales from the App Store, as well as movies. It works on the model of a little here, a little there, but most likely the iPod touch will be a continual trickle of income for Apple from the moment you buy it. 

Of course you might choose not to buy anything and only use free apps, but from that point of view, you are spoilt for choice. Some may say that the App Store is a closed shop, but it's well stocked. A pricy device it might be, starting at £189 for the 8GB version (a hike of £40 from last year) and rising to a staggering £329 for the 64GB (up £30), but you also get the best portable media player for your money.

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Out of the box, the new iPod touch reflects the changes made recently to the iPhone 4, with a slimmer profile and the hint of a square design. The back is still stainless steel, with a slightly squarer profile than previously. The new touch is narrower overall and one of the changes has been to remove the way the casing wrapped around the edge in previous versions.

And we're not sure we like this change. Yes, to look at, the new iPod touch screen is now framed by only a thin silver border. This means that the edge is harder and less comfortable to hold. Whereas previous versions had a comfortable edge, the new iPod touch does not. Many, we suspect will use a cover, in which case this change will make little difference.

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Otherwise the design remains more or less the same, with a single face button below the screen, a volume controller on the right-hand side and a standby button on the top. Again, the angular edges mean that these buttons now sit on a reverse slope, so they are more difficult to press than before. The inspiration behind this design is clear - minimalism. When looking at the face of the iPod touch you can't see these controls as they are now tucked away behind, but as a result, they are slightly less accessible.

Other points to note are the front-facing 640 x 480 pixel resolution camera above the screen and a camera in the rear corner, with a mic next to it. The resolution of this camera is undisclosed, and Apple didn't declare that it wasn't going to give you the same performance as the iPhone 4's camera when they unveiled the new model, but more on that later.

Across the bottom of the iPod touch we have the 3.5mm jack, dock connector and an external speaker.

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Build quality is solid, as you'd expect and there is no doubting that the iPod touch is a very sexy device. It feels premium, it looks premium, but you'd demand that from the somewhat premium price that you pay for it. It now measures 111 x 58.9 x 7.2mm and weighs 101g.

Of course the most significant change from the previous iPod touch is the display. We didn’t hear previous iPod touch owners complaining about a lack of resolution, but this is a big step from 380 x 320 to a cracking 960 x 640 pixels. A lot has been said about this display from the iPhone 4 and you get all the benefits of the high pixel density here.

The result is that it can render incredibly fine text. You can head into a website and read the text where previously you'd have only seen fuzz. The limitation is no longer the screen so much as what your eyes pick out from the page. It's hugely impressive and a great step forward for mobile displays and we hope it will be a driver to pull the rest of the industry along with it.

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But it isn't just visually that the display is impressive. Once again you get the silky smooth glass surface that responds instantly to your touch and gives you multitouch support too. Pinch zooming on images, webpages and maps is incredibly slick. This response is also due to the bumped A4 processor – the same as the iPhone and iPad - as well as all the benefits of iOS4, in this case the latest iOS4.1.

That means you get the same performance as the iPhone 4, which is very slick, and the same experience. This doesn't just extend to media functions, which is what you might expect for something that has its routes in portable music, but you also get the likes of email, calendar and contacts that will sync with your Mac, but also all those connected apps and games, thanks to the device's Wi-Fi connection.

iOS4.1 brings with it some new features, taking advantage of the new hardware on offer in the iPod touch. The first is FaceTime, using the internal camera to call anyone with an iPhone 4 or another new iPod touch. Video calling is nothing new on mobile phones and we're not sure it will ever be a mainstream feature, but we're interested to see where app developers take it. As it is, of course, you'll need a Wi-Fi connection to use FaceTime, but we successfully made a FaceTime call whilst walking around Covent Garden using MiFi, flipping the camera to show off a sight here and there.

FaceTime might be of limited appeal to some smartphone users, but for those who have a simple pay as you go phone, it may mean a new affordable way of communication from home using Wi-Fi, and equally we can see it being used by those who want to call internationally without the cost. We also tried Skype and found that making voice calls was ok, the important inclusion of a mic giving added versatility.

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One of the new iOS4.1 features you don't get is the ability to capture/create HDR photos. Adding a camera to the new iPod touch was certainly one of the biggest highlights, but in reality it looks more like a token gesture. Apple have had a funny history with cameras in its mobile devices and the camera in the new iPod touch doesn't impress. Not only is the resolution low - even by basic camera phone standards - but the resultant image quality leaves a lot to be desired.

Images are noisy and they lack detail: even shooting in fine conditions, the results are nothing to get excited about. To Apple's credit, they have managed to hold on to fairly vibrant colours, albeit with a slightly mottled finish. The other killer no-no is that it is a fixed-focus camera. Fixed focus lenses have hampered the performance of pocket camcorders and phones for several years. They result in images that lack sharpness, which is what the iPod touch gives you.

Tapping the screen changes the exposure point, so if a scene seems wrong, metering elsewhere may make it look better, but in reality, we were expecting touch focusing. That said, this is a PMP afterall and its easy to get expectations inflated. 

The HD video results are average, performance akin to fixed-focus HD pocket camcorders shooting at 1280 x 720 30fps. There is a general lack of sharpness and detail, which is a real shame, as Apple could have had something pretty unique to offer here. That said, you can make a cheesy movie in seconds using iMovie and upload it to YouTube in HD, and the editing is so simple it's bound to be popular.

YouTube content looks sensational too as the higher resolution screen comes to the fore – we watched side-by-side HD trailers from YouTube on the new and last iPod touch and there is a marked difference in quality.

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And that's the real story with the iPod touch: content. With the Apple App Store serving up what we consider to be the best selection of apps, both paid for and free, and the choice of material from the iTunes Store, there is plenty to get your hands on. You're not limited to these sources either, as you can add other content from your PC, although you do still have to use iTunes. You also get 720p video playback, so if you have HD MP4 content, you'll be able to move it over to the iPod to view on the stunning screen.

Format support is weak overall, and purists will bemoan the lack of audio codec support as will those with collections of movies. If the iPod touch is to be your media player and you have various formats, you'll need to do a lot of converting, but as is often the case with Apple, they provide the support for the services they supply.

But accepting this content caveat is worth it, because no other PMP gets within reach of the versatility that the iPod touch offers. Some will have wider video support, but lack any sort build quality, some will offer you apps, but lack the strength in gaming. Whichever way you draw the line, when it comes to versatility, the iPod touch is king.

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And when it comes to gaming, iOS4.1 brings Games Center with it. This is in the very early stages of its life and so far there is little gaming to be done, but conceptually we like where it is going. Being able to game online with friends simply and easy will be really popular, especially among a younger generation who'll be able to sit in their bedroom and FaceTime and play with their friends. 

As a music player the iPod touch is excellent, with great sound quality and simple controls. We like the vibrant album art that the screen shows off beautifully, but we're saddened by the fact that the iPod touch ships with Apple's standard headphones. An in-line remote makes control much simpler for in-pocket control, especially if you master Voice Control. As it is, top of your list should be a set of third-party headphones to get the best from this player, but that's true of almost all MP3 players on the market. 

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But despite being an excellent PMP, the iPod touch faces big rivals these days. Increasing smartphone proliferation, strengthening of the Android stable and the birth of tablets could see the iPod touch pushed aside with those more affluent buyers. We've seen a standalone Android PMP from Samsung and if that can build on the success of the Samsung Galaxy S, then we may see the iPod touch facing more challenges in the future.

To recap

It sounds great when listening to music, looks great when watching video and it is a real pleasure to use. Easily pocketable to take on the move and with excellent fast rendering of websites and connected apps for when you are in a friendly network, you get the benefits of the iPhone without having to pay for it

Writing by Chris Hall.