The iPod touch would be perfect; it has everything you're looking for and more. It starts at around $250 for 8 GB. Plus it has tons of apps, many of which are free. I love my iPod touch. Make sure you get the 4th generation, that's the current one that has a camera and microphone. Or, if you want one that's even newer, wait a few months, the 5th generation should come out in September.
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