What exactly does this mean? I'm not sure I understand what flash memory is. Will I still be able to connect the Ipod to my laptop via USB and have it automatically update or do I have to drag and drop the things I want? Does flash memory mean I can use a usb card or flash card or something to have more than 16gb of space? I mean I doubt I'll use 16gb of space as it is, I only have about 4gb of music and video and pics in itunes so the space really doesnt matter to me. Any help anyone can provide to me is greatly appreciated. Thank you

It's just the type of memory used, it won't affect the way you use the device. Right now in your older ipod you have a hard drive. The hard drive has moving parts (which is not good for reliability) and it causes the device to be thicker.
With Apple using flash instead...the device should be more reliable (no moving parts on a flash drive) and it allows apple to make the device thinner. I'm sure there are other advantages as well but I don't know what they are. of course one big dissadvantage is that flash memory costs much more. You will still connect the ipod touch to your computer the same way as you do with your older ipod.