Never had the Touch, but here are some things that are upgrades from the Touch to the Diamond:
-twice the RAM (Touch had 128 MB, right?)
-4 times the screen resolution (you have to see it to understand just how beautiful it is)
-WiFi
I actually like the back and don't think it's girly at all. I've had no problems viewing it in daylight, significantly better than my last phone (the PPC-6700)
I would switch just about any phone on the market for the Diamond (except the Pro, which is what I'll be switching my Diamond to - have to have my keyboard
)