Apple unveiled its latest line of iPods this morning, including the newest iteration of the iPod Touch, which it billed as the "funnest iPod ever." What exactly makes it the funnest? Well, according to Apple CEO Steve Jobs, it’s in large part due to the games. "The iPod has been the best portable device to listen to music on, then it became the best portable device to watch movies on," Jobs said. "Now you could make the argument that it’s the best portable device to play games on."

With access to Apple’s App store directly from the device, 700 games are already available for it right now and hundreds more are coming soon. While the previous Touch and the iPhone also play these games, it’s likely the unit’s thin and sleek new look, volume controls, and built-in speaker that made Apple feel confident that it has a true challenger to the handhelds from Sony or Nintendo. Either that, or it just needed a new marketing hook. Indeed, seeing the new commercial for the iPod Touch during the presentation, the emphasis was entirely on the games, showing a pair of hands holding the device and playing several different titles. But, you know, with some catchy music hand-picked by Apple playing in the background.

Jobs invited one of Apple’s game experts on stage to demonstrate Spore Origins from EA (just released), Real Soccer 2009 from GameLoft (which hits the App store today), and Need for Speed Undercover from EA (coming soon). Of those, Need for Speed was clearly the crowd favorite.

After the presentation we got our hands on the new iPod Touch and played some Real Soccer 2009 and Need For Speed Undercover for ourselves. Real Soccer seemed fun, yet I found myself often missing the on-screen control pad buttons -- I’m still waiting for one of those iPhone controller mockups to materialize into a real product). Still, this didn’t stop me from scoring a goal in under 30 seconds. Need for Speed was much more impressive, though, and not only looked great on the sharp screen, but controlled really smoothly -- evading cars was a breeze. I’d buy it. As for the new iPod itself, I have to say it was pretty damn sexy. They make the next iPhone this thin and I’m totally giving up my work-supplied Treo.

In any case, it was interesting to see Apple finally making official what many had speculated for quite some time: that with the iPod and iPhone Apple has its sights set on gamers. With a thriving community of developers, a fantastic software delivery system, and a deceptively advanced piece of gaming hardware in its multitouch screen and motion-sensing accelerometer, the iPod and its variants are quickly becoming formidable gaming devices. Let’s see where this goes.

For more on Apple’s announcements this morning, make sure to check out our sister site PC Magazine’s full coverage, including info on the new iPod Nano and iPhone software update.