32GB SANDisk flash memory drives were announce earlier this year. I have not seen a real price, but the consensus in the news sites seems to indicate $600 more than a laptop HDD. So that's something like $800.

I don't know how long it would take to bring the prices down.

If Apple are going to replace HDDs with flash RAM, and soon, I don't see how that can be done without both a reduction in capacity and a price hike.

I wonder what the capacity utilisation figures are for an iPod? Maybe the reduction isn't a problem.

Flash RAM suffers from "wear and tear" problems. The memory cells can only be overwritten so many times before they fail. But again, unless I misunderstand how this works, one would have to do a lot of adding and removing of files to worry about the MTBF.

But such a thing would substantially improve battery life.