It's frustrating that they're going to be more or less halting production on all models except for the ZuneHD. The entire reason I bought a Zune was that I wanted a high capacity MP3 player. I really don't see why they couldn't keep the Zune120 around as well. I tend to have all my music files in relatively high quality, and as such, have quite a bit more than 32GB worth of stuff on my current Zune.
Also, I actually prefer the touchpad to a touchscreen, since I don't want fingerprints all over my screen protector.