Not quite the video iPod we were hoping for, not by a long shot, but Apple is refreshing their flagship iPod (with video) models today with a whole lotta' software love, and a couple hardware tweaks for good measure. The screen is now 60% brighter, the battery can last up to 3.5 hours during video playback, and the iPod includes new headphones, but otherwise the specs remain the same. As for software, the iPod is finally getting gapless playback, text-based search and brightness controls, along with a whole slew of games. The 'Pod has Bejeweled, Cubis 2, Mahjong, Mini Golf, Pac Man, Tetris, Texas Hold 'Em, Vortex, and Zuma bundled, and you can nab new games for $5 each off of iTunes. Maybe the best news is that Apple is dropping the prices and bumping the storage: you can get a spankin' new 30GB iPod for $250, and the new 80 gigger for $350. No word yet on availability.

Live from the Steve Jobs Keynote -- "It's Showtime"