Apple iPod Touch (third generation, 32GB)

Pros: Portability, versatility, durability, usability, funability, everything

Cons: I wish it had a camera and that it was a phone. Basically I wish it was an iPhone that cost $300 and didn't require a contract.

Summary: Combined with an endless supply of applications from the iTunes Store, the iPod Touch is a unique portable device that has doubled as my Skype phone, wireless mouse and keyboard for my MacMini Media Center, portable games machine, portfolio for my web, video and photography work, currency converter, financial tracker, USB thumb drive, PDA & contact manager, Amazon Kindle, Japanese instructor, portable dictionary, and music/podcast player. They could have charged me $400 and I would have paid it. Amazingly, with all of those uses that I listed above, I've only spent a total of $20 on the App Store. Incredible.
If you don't have an iPod, get an iPod touch. Period.

Oh, and the Facebook/Twitter experience is SOOOOOOO much better on a portable device like this one. I find myself updating my status and catching up with friends much more often.