This deal has ended.
Amazon has the 8GB iPod Touch for $205 with free shipping. This is the best price we could find by $10, and you can save on sales tax (except in KS, KY, ND, NY, and WA). They also bundle a $25 Gift Card here. On the iPod page click the "add both to cart" button to get the discount. The iPod Touch is one of the most popular gifts as it features the front and rear facing cameras as well as access to the iTunes app store and more. Note that you will have to upgrade shipping to ensure it arrives before Christmas. Consider a free trial to Amazon Prime to do so.