Dispelling fears that it might be dead, Apple will not only will keep the iPod Classic alive, but they'll give it even more capacity. Previously the most voluminous iPod Classic held 120GB, and now you can hoard 160GB of tunes in there. Sheesh, that's 40,000 songs.
Getting generous, Apple decided to sell it for the same price as its predecessor, it's available now for $249.
UPDATE: The comparison chart that accompanied this article original had the iPod Classic 1G as having a video resolution higher than the 2G. It was an error and has been corrected. The 1G and the 2G both have the same screen resolution.