
No, your eyes don't need to get checked. You read that correctly! Apple will release a larger iPod Touch! This iPod Touch will have a 5", 6", or maybe even a 7" screen. Steve Jobs has said many times that reducing a tablet's screen size to 7" wouldn't offer a satisfactory tablet experience, and would require downsizing of user's fingers. Hey, key word: tablet. This would be different, because the iPhone/iPod Touch interface is designed for a small, 3.5" screen, whereas the iPad interface is designed for a larger, 9.7" screen. For example, in YouTube you're either seeing the video or the list of videos when using an iPhone or iPod Touch, but with an iPad you're seeing both. Problem is, you can't really stick a screen that big in your pocket and run. My guess is that Apple will continue manufacturing 3.5" iPod Touches for the people who run/carry their iPod Touch in their pocket often.
My opinion is that this is a great idea. Here is a quote from a comment on Gizmodo:
"My [HTC] Evo has a 4.3" screen and it is a great size for doing similar tasks that you'd be doing on an iPod Touch. I can't imagine going back to the screen of my [HTC] Hero now (3.5")."
This voices the feelings of many iPhone/iPod Touch users. I myself, owning an iPod Touch 3rd generation, feel cramped on the screen too many times. I've always wanted to have a larger screen and was so excited to learn that Apple is making a larger iPod Touch.