Too little, too late
So they've copied the Touch's interface, but included fewer built-in apps and there's no App Store for extending its capabilities. And no method of directly purchasing music (like the iTunes Store - not exactly a dealbreaker for me, but might be for some). The screen might be nice, but then the iPhone's screen is pretty damn good, so I guess the Touch's is the same. And despite what some reviews say, the iPhone sounds perfectly good so I'd expect the Touch to be similar. Plus no mention of sync software etc, and Sony's has been notoriously bad in the past. I know iTunes isn't everyone's favourite bit of software (it makes more sense on a Mac than in Windows, in my experience), but it does make it very simple to work with your portable of choice.
So apart from saving about a tenner, what's the point of buying the Sony? More restricted, limited and almost certainly harder to operate, without the software/media ecosystem or the third-party/hardware ecosystem either. Sorry, no sale...