I'm with you. Listening to music on my iPod touch was such so clumsy that I eventually gave it up and now use only the Classic and Shuffle for music. But one problem is that the Classic's interface has reached the pinnacle of utility, and Apple always feels it has to reinvent the wheel in order to give users a gimmicky new way to do things (for example the Shuffle 3G vs. 2G). I suspect Apple will either drop the Classic in favor of trying to steer users to some other, less optimal iPod for music, or mess with the design and make it less user-friendly.
Even my click-wheel iPod from 2004 can be filled up with lossless files only. What difference does it make to you, how they market it? Nevertheless, I kind of like the idea that Apple would have this one model where they use higher quality components (DAC, earphones...) all chosen to deliver superior audio quality (which some audiophiles, if I remember correctly, routinely criticize on the iPod). Of course that would create the impression, that the rest of their iPod lineup is of subpar audio quality, so I'm not sure they would want to deliver that message, especially when this higher quality model would probably remain a niche product.
