Having worked for an Apple retail store, I can tell you NOT to expect a price drop on a particular model until a newer generation comes out from the assembly line.
If you are anywhere near an Aple retail store, always peek in (especially on the weekends) to see if they are having some sort of sale. It will usually be a giant mass of products in their theater section. The items will be either demo models or "refreshed" product (meaning it was purchased and then returned for one reason or another, but nevertheless meets factory standards of operation and condition unless otherwise noted).
By default, demo and refreshed product go at 10% off list price, but at these "fire sales" as the call them, you can sometimes score an ipod or digital camera or mouse or what have you at $50 to $70 off. All the product is open for inspection as well.
Also, you can always call an Apple retail store and ask if they have any refreshed ipods (or laptops or monitors or whatever), and the inventory manager will tell you.
If you can find a better deal online, by all means do so. Good luck.