I think it really takes some time for the next generation to come out. There isn't much about next generation yet, but I think it is unlikely for them to add touch screen. A few other ebook readers add touch screen and it turns out making the screen more glare, as touch screen needs to add an extra layer to screen.
I own the Kindle 2, and I think it is excellent. I've to say I love it! I think I've read over 30 books with my Kindle, no glitches so far! And there are some improvements came out last week:
http://www.amazon.com/gp/redirect.html?ie=UTF8&location=http%3A%2F%2Fwww.amazon.com%2Fgp%2Fhelp%2Fcustomer%2Fdisplay.html%3Fie%3DUTF8%26nodeId%3D200324680%26ref_%3Dhp%255Fnavbox%255Fspot%255Fkindlelearnmore&tag=moreinfo-po-20&linkCode=ur2&camp=1789&creative=390957
And I remember I read these reviews about the benefits of the Kindle when I decided to buy it:
http://www.amazon.com/gp/redirect.html?ie=UTF8&location=http%3A%2F%2Fwww.amazon.com%2Freview%2FR2DUM7S4XW06QN%3Fie%3DUTF8%26ASIN%3DB00154JDAI%26nodeID%3D%26ref%255F%3Dcm%255Fcr%255Fpr%255Fcmt&tag=moreinfo-po-20&linkCode=ur2&camp=1789&creative=390957
http://www.speedreaderxreview.com/is-kindle-2-worth-the-price
Finally, in case you don't know, Amazon has just put a price slash on the Kindle 2, and it is now selling $100 cheaper than the price I got my Kindle, and it adds in international wireless access and native PDF support... So take the chance if you want it.
Hope it helps :)