The only concern I would have as a parent (even though I'm not one yet) would be there access to the internet. If you have your wifi password protected at home so no unsupervised web surfing could occur it would be for the best. Unfortunately we live in a sick world.
It's just me but I would have waited till they are a little more responsible...that's not to say your kids aren't.
I have a 12 and a 7 yr old, btw. The 12 is a boy and doesn't take as good a care of electronics as my 7-girl does.
I know they basically have 'free' money (sorry about the fire) to spend but if they only wanted a normal iPod then why spend the extra money on a scratch-susceptible and breakable glass product?
I believe the OP has probably already made a decision on this matter. He's not responded to anything since creating the thread over a month ago.
My God, someone finally noticed.
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"Oh Father of the Four Winds, fill my sails, across the sea of years.With no provision, but an open face, along the straits of fear..."
Perhaps opinions don't need a shelf life but if you're answering a question in which the OP abandoned immediately after asking, maybe you just like to see yourself type.
I can't say much because I'm only 16 and I have an iPhone but I've seen kids around that age with cell phones and more. An iPod Touch wouldn't hurt. :P