With the VERY recent announcement of the brand new iPod Touch 4G TopicFire has decided to do a side by side comparison of the old vs the new and of course you don't need to be a psychic to see which is the clear winner here. Below is the comparison quoted from the source with my own opinion thrown in:

Battery

3rd gen

30hrs audio, 6hrs video

4th gen

40hrs audio, 7hrs video

Clearly the 4th gen has a slight advantage over the previous generation.

CPU

3rd gen

833MHz ARM A8

4th gen

Apple A4 Chip

Apple is planning on using the same processor they are using in the iPhone 4 which means it will be substantially faster than before.

Storage

3rd gen

8GB/32GB/64GB

4th gen

8GB/32GB/64GB

no difference

Memory

3rd gen

256MB

4th gen

512MB?

Apple has never been one for talking RAM specs, so we'll have to have a guess here until the teardowns hit the web. However, given that the 4th gen touch has got the A4 chip and was seen running some seriously impressive stuff at the keynote, we're willing to bet there's the same 512MB payload as you'd find in the iPhone 4. (Taken from the source)

Display

3rd gen

320x480, 3.5” LCD

4th gen

960x640px, LED backlit

Clearly the 4th Gen has the upper hand the screen is 3x bigger in resolution compared to its predecessor.

Connectivity

3rd gen

Wi-Fi b/g, USB 2.0, Bluetooth

4th gen

Wi-Fi b/g/n, USB 2.0, Bluetooth

With the addition of Wi-Fi /n/ based routers there is nothing new

Graphics

3rd gen

PowerVR SGX 535

4th gen

PowerVR SGX 535

Both use the same GPU technology.

Form

3rd gen

110 x 61 x 8.4mm, 115g

4th gen

110 x 59 x 7.2mm, 101g

The 4th gen iPod touch is clearly SLIGHTLY smaller and only 14g lighter but hey its an improvement.

Imaging

3rd gen

Nothing

4th gen

Front & rear facing camera

clearly the previous generation lacked any source of taking pictures but could only view pictures while the 4th gen can take pictures and view them.

The Source did a SUPERB job in distinguishing the differences between the old and the new and I must say the iPod touch 4G is looking more and more interesting. Its almost got the same specs of the iPhone 4 (hardware wise of course) except without the antenna issue.

Source: TopicFire