What I think Apple will do (everyone, stop rolling your eyes…) is upgrade the storage and adjust the price slightly (+/- $50). This is the usual iPod tactic to stir the pot and generate sales.

Then I would head over to the Apple store on-line and snap up the ‘old’ model for $50—$75 cheaper than it was 24 hours before.

I don’t think the ipod touch will drop in price since apple doesn’t get the money from AT&T for it. Apple gets money for all of the iphones purchased from AT&T, so they have no reason to drop the price of the ipod touch