The nano is the obvious choice if you only want a few thousand songs on it.
The only downside is that, as Gromit says, the screen is fairly small (perhaps hard to read in the car?), and it's the circular control.
The iPod touch is more expensive, but can store more songs, and has a much larger screen and easier interfacce for browsing songs (just use your finger).
I'd encourage you to try them at an Apple store, if you have one nearby.
The touch will also let you check your email and browse the web (as well as read books, play games, etc.) if you're at a wifi hotspot.