It looks like a 2g iPod touch. Can't tell if it's an MB or MC model. Anyway, the price is a bit high for a device that probably won't be supported next year. You might as well save up some money and get a 4g iPod touch or a 3g one (32 or 64gb)
The hardware matters too. 2g iPods and 3g iPhones have 128mb of ram, 3g iPods and 3gs iPhones have 256mb, 4g iPods and iPads have 256mb plus the A4 chip (1GHz) and the iPhone 4 has 512mb of ram with an A4 chip. 2g iPods are slowly becoming unsupported. Check the compatibility list of newer games.
Aren't all the 2nd gen 8GB MB models and 3rd gen 8GB MC models?
The main difference is hackability, as mentioned above. Believe me, I had to wait over half a year for a jailbreak for my 3.1.3 MC model to be released (Spirit).