What's the difference between the different "generations" of iPod touches? I've been looking at buying a used ipod touch from craiglist but I'm confused as to what's what. The adds all say things like "2nd generation 8gb" or "3rd generation 16gb" and I'm not sure what the difference is.
The short answer is processing speed, screen resolution and memory. The newer ones are obviously faster, and the lastest generation (4g) includes both front and back cameras for shooting video and video calling.

For a full list of the differences check out this wikipedia page.