Ipod Touch Memory Help, can I swap it for more memory?

I have an 8 GB Ipod Touch, but I am running out of space. I heard that you can trade in your ipod for a 10% discount on a new one, how does that work? And is there an easier way to add memory or get a new ipod with more memory (like a 36 GB) by swaping the one with less memory for the one with more memory and paying the difference of the two Ipods? I would really like the help!