Additional close-up photos (which are most likely fake) of the rumored 5th gen iPod Touch are spreading across the web. The most noticeable difference between this device and the current design is the removal of the physical home button, which has been replaced with a capacitive button (a la the Evo 4g).
Earlier this year, there were rumors that Apple would be removing the home button all together, but the 4 and 5-fingered multitouch gestures required to replace the button proved to be cumbersome when used on the iPod Touch’s small screen.
The home button is one of the only points of weakness on iDevices, since they frequently become stuck or break after prolonged use. Switching to a capacitive button on devices would be an interesting design decision, but don’t expect to see it on official products any time soon.