@ManipUni: I still really like the UI, personally, and most reviews have agreed. I definitely prefer it to the iPod touch. The iPod has more features and way more (and better) third-party apps, no question.

As for why you haven't heard much about it lately, for better or worse they are on an annual refresh schedule and the developer promotion for this year's iteration hasn't really started yet (it will start at MIX).