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Steve Jobs said: "We've gone wild. It's the biggest change in the iPod lineup ever."
The iPod Shuffle, the smallest of the range is reverting to its square shape with buttons of the 2nd generation style but smaller. It has voiceover and playlist functions and a handy clip too. The $49 device will hold 15 hours of music and comes in five different colours.
The new iPod Touch has slimmed down and now has the same high-definition retina display screen as the iPhone. The Touch features a front-facing camera so that users can conduct video conversations with other Touch and iPhone users with Apple's FaceTima service over wifi. There is also a camera on the back of the Touch that can take photos and HD video. The Touch will cost between $299 to $399.
The new iPod Touch's improvements brings it up almost to the same standard as the iPhone meaning that many people may wish to buy the Touch rather than an iPhone.
Harry Jones at mobile phone comparison website Top10.com said: "With today's updates, Apple is closing the gap between the iPod Touch and the iPhone.
"The iPod Touch not only now packs nearly all of the iPhone's features such as the Retina Display and front-facing camera, but is cheaper, thinner, lighter and does not require a mobile phone contract.
"With FaceTime calling, customers can make video and voice calls over WiFi networks instead and use a WiFi device to get a 3G connection on the go.
"For most people, however, the iPhone is still the right choice, providing users with a conventional phone number, voicemail, picture messaging and a 3G internet connection that's available almost everywhere."
The other announcements made last night included a change to the Apple operating system which will be updated to iOS4.1 and will enable high dynamic range photos, HD video upload over wifi, TV show rentals (more on this later) and a game centre. The iOS4.1 is free and available for download for the iPhone and iPod Touch. A new operating system will also be available for the iPad soon which will offer wireless printing.
Also, iTunes 10 has been revamped to be more "elegant and simple". It will feature Ping, a social network for music described as "Facebook and Twitter for music". It will allow users to share their favourite tracks with friends.
And the final big update was to Apple TV which will be reduced in size by a quarter of the previous TV and also in price to $99. It will no longer store media but instead will only allow rentals. Users will be able to rent TV shows for 99cents each and $4.99 for a film.
What do you think of the new updates? Will you be pre-ordering your new iPod as soon as it's available in the UK? Leave a comment and share your thoughts.