I don't have a strong opinion, but I think general consensus is that the hard drive model sounds a bit better. To really test it out, you need to bring your own (good quality) earphones, and compare on lossless tracks. Meaning, it's impossible to test this at an Apple Store.
But...I would hold off on buying an iPod right now. They always bring out the new models during back-to-school time, so it's virtually guaranteed that there'll be new models that'll be better, cheaper, or both, by the first week of September.
But...I would hold off on buying an iPod right now. They always bring out the new models during back-to-school time, so it's virtually guaranteed that there'll be new models that'll be better, cheaper, or both, by the first week of September.