I have absolutely no knowledge of either! DCs, aged 9 and 6, have been quietly saving every penny of birthday money, grandparents holiday gifts etc as they are desperate to buy an iPod, apparently.
But today, they tell me they would consider a kindle fire!
Basically, they want to play minecraft. I don't want them wasting their hard saved for cash in something out of date in a few months. Nor do I want them having access to the Internet without my control (they use my laptop, and have gmail accounts, but only I know the passwords).
I have a kindle fire and I love it. However, you shouldn't forget that kindle's are designed for reading. You can have different apps on it like an ipod touch or an ipad but the screen quality and speed is not as good as an ipad or other tablet devises.
I read and will sometimes watch some TV on mine. I don't play games so I cannot tell you how effective it is. I shouldn't imagine it would be the best sort to buy though.