As expected, Steve Jobs unveiled an entirely revamped line of iPods at an Apple Special Event in San Francisco today. Most of the models received respectable upgrades, but the iPod Nano got a significant overhaul. The show-stealer, however, was the iPod Touch, a new member of the iPod family that’s essentially an iPhone without the phone.

The iPhone itself got no major upgrade this time around, but Jobs announced a huge price drop on the 8GB model (which has been selling in far greater numbers than the 4GB model) from $599 to $399. According to an Apple press release the apparently discontinued 4 GB iPhone “will be sold while supplies last.” The $200 price cut on the 8 GB model should get the attention of a lot more customers. It looks like the analysts had better re-think their iPhone sales projections again.

Jobs also announced some enhancements to the iTunes Store: iPhone ringtones that can be created from songs downloaded from iTunes and the ability to download songs over a Wi-Fi connection to your new iPod Touch or iPhone.

Yes, that’s right. The iPod Touch, like the iPhone, can connect to Wi-Fi networks and can do all the cool things an iPhone can do, such as browse Web sites and view YouTube videos. In fact, the iPod Touch looks almost exactly like an iPhone, but it’s slightly thinner.

The iPod Touch comes in two sizes, 8 GB at $299 and a 16 GB at $399. Because the iPhone is the same price as the high-end iPod Touch, customers must choose between phone capabilities and twice the storage space when spending their $399. You’d have to think the iPhone is the obvious choice, but one must assume Apple has a good reason for doing this.

The iPod Nano looks completely different now, fatter and squatter than its predecessor. The main reason for the change in form factor is to accommodate the 2-inch color video screen. The iPod Nano now comes in just two capacities rather than three: a 4 GB version for $149 and an 8 GB version for $199. (This compares to $199 for the previous 4 GB version and $249 for the 8 GB version.)

The original iPod – the one that uses a hard drive for storage rather than the flash memory used in the others -- has been renamed iPod Classic. The main change here is a massive increase in capacity. Instead of 30 GB and 80 GB models, Apple now offers an 80 GB model for $249 and a mind-blowing 160 GB model for $349. Jobs said that’s enough storage for 40,000 songs. Which begs the question: are there 40,000 songs worth having? The iPod Classic also has improved battery life: 30 hours for audio and 6 for video on the 80 GB model, a whopping 40 hours for audio and 7 for video on the 160 GB model.

The smallest of the iPods, the Shuffle got no hardware upgrades or price cuts (it’s still 1 GB for $79), but will be available in several new colors.

Finally, Jobs announced a partnership with Starbucks Coffee in which in extra icon will appear on iPhones or IPod Touches that get close enough to a Starbucks’ Wi-Fi location. That icon will show you the name of song the Starbucks store is playing and allow you to buy it from the iTunes Wi-Fi Store. I can’t get terribly excited about this, but then I rarely go to Starbucks.

All told, Jobs gave iPod fans most of what they wanted in this long overdue update of the product line. And as he noted several times during his presentation, these sexy new consumer toys have arrived just in time for the holiday buying season. I smell profits.