D.M.
My children (boy age 11 and girl age 8) have both. They play with the iPod Touch way more than anything else. The games are mostly free or cost 99 cents. They especially like the free texting and calling with a free app they have (you have to be in a wi-fi area to use it). They also have their music on it. The new iPods have the facetime feature which my daughter has and loves. I would recommend the ipod over the DSi.