Physical buttons and Accessibility
2nd generation iPod shuffle remains a great design, with the built-in clip, physical buttons you can operate with your hand in your pocket, and the user's own choice of headphones, so I too am pleased to see the design return.
Having the controls on the headphone cable was just stupid, and an lousy excuse to charge exorbitant prices for mediocre headphones. My guess is that Apple noticed a drop in sales when they switched to the 3rd generation.
In my case, I have a multihandicapped daughter who loves music and loves pressing buttons. She has cortically impaired vision. She has a 2nd Generation iPod shuffle plugged into a cheap-as-chips portable handheld amplifier. We've tried her with touchscreens, but her vision is really not good enough. She needs to FEEL the buttons.
So... now I know what she will be getting for christmas - especially if belkin or some such produce a little handheld amp with a neat housing for the new shuffle. The shuffle is cheap enough that we can have several of the things about the house, and she can switch to another one when she wants to hear another playlist.
I often prefer to operate devices in the dark, in my pocket or whatever, without using my eyes. A physical button is still more 'sound' feedback for the fingertips than a short vibration (which affects the whole hand). If they can localise the vibrations on the screen somehow, we might be getting somewhere, but for now...
Touchscreens are an accessibility nightmare for anyone with partial sight or any kind of blindness.