It used to make a lot of sense - to me anyway - how they arranged their iPods from cheap(ish)/only basic features to the luxury-versions with more features.
I.e., shuffle -> play music; nano -> all of shuffle's features + view album covers, song texts, song titles to the music, calendar; iTouch -> all of nano's features + the whole smartphone without phone thing
But now, ever since the introduction of the iPhone 3G, this doesn't hold true any more. The iTouch is supposed to have all the features of the nano plus more - but now it doesn't have a camera?
The only reason to give the nano a camera and not the iTouch would be to distinguish it from the iPhone and market it as a gaming device. But then it doesn't make sense how the basic model of the iTouch has a slower processor and GPU than the iPhone.
I don't know, but from these oddities in the lineup I'd almost go as far and predict more changes to come very shortly. Either push the iTouch more in the gaming niche and make the nano the new multimedia device (as opposed to just audio in the first two generations of it), or push the iTouch more into the all-in-one direction - which would mean there ought to be a new iPhone as well in order to keep the two apart.
Not sure if I'm making sense here, but right now the nano, iTouch, iPhone lineup is quite counter-intuitive and almost non-transparent (yes, choice is not always a good thing).