I mostly just use playlists created in iTunes by criteria. While perhaps not as powerful as what the Karma can do, I find this actually fits my needs very well- better than I thought.

I almost never use the coverflow, even thought it is pretty awesome. I just find the artist I want and select and album or hit the shuffle option.

The thing I like about the touch is the ability to hit "shuffle" at the beginning of any playlist and not really have to worry about turning shuffle mode on or off. In my five minutes of experience with my wife's classic I couldn't figure out how to tell it to play a playlist/album/artist in shuffle mode without first selecting the list, then changing it to shuffle (which was a pain to navigate to). Again, maybe it's just experience- but it seems much easier to get a shuffled selection of songs on the touch vs the classic.