A quick product review of Kindle Touch bookreaders, for those who may be interested:
I decided a few months ago it was time to upgrade my Kindle 2 (i.e. second generation) to one of the newer versions. Though I realized there weren't huge differences, I thought the main advantage would be the sharper, more contrasty print screen. I had examined my wife's Kindle 3 and found it much more readable. And, with touch technology being the wave of the future, I figured I might as well try that out.
I've had both machines now about three months, using both intermittently. The touch feature is a mistake. It's claimed you get used to it, but even after several months of acculturation, I find the touch operates erratically. Sometimes you get what you want (usually, the turning of a page) but far too often, you get what you don't want (flipping forward two or three pages or, if you happen to touch a footnote, skipping annoying to the footnote. The absence of buttons for common menu features has a similarly frustrating effect: Your touch of the screen may or may not take you where you want to go. And getting back from these side streets isn't always intuitively obvious.
Page-turning is slower on the touch version. Not only is touchscreen technology slower (which is not appreciably changed by altering the refresh schedule), but you're delayed by having to flip your thumb onto the screen (and make sure also that you're not coming down on a footnote) each time a page is turned. On the models with push buttons, I can hold the Kindle with one hand (either hand!) with my thumb poised above the "next" button for a page-turn that doesn't require my eyes to shift elsewhere, and it operates almost instantaneously.
Buying a new Kindle or acquiring your first one? I'd say stay with the Kindle 3 for now. It has the same better-defined screen as the touch models, but retains physical buttons for page-turning and menus.