Argos are selling the 2nd Gen Ipod Touch 32GB for £199.99, cat number 513/8513
This item is RO so stock is limited, only two stores in West Yorkshire have it available (Birstall and Leeds Guiseley if anyones interested), but good buy if you can find one.
Both the 8GB (513/8458) and 16GB (513/8496) Ipods (2nd Gen) still exist on the Argos systems, though neither are on the website. I don't know if this stock has been withdrawn, or what the price is if they're available, but I will post any info I get.
I had been watching this item to see if the price would drop since it went RO in January, but I gave up and bought the 3rd Gen 32GB when it was £207.99 (not bad with staff discount!)