They actually fixed the problem with the new ipods and iphones. The old ones were HORRIBLE though. I like to think anything can be polished. I also actually masked off and polished the faceplate of my old stereo the same way. Many electronics these days are made with these crappy plastics, but with a little car, they can be brought back as good as the day you bought them!
They also have screen protectors. I used to have the same problem. I bought a pack of them online after having the same issues that you are having. All I do is apply the s/protector when ever the edges start to peel or I start to have a problem seeing the screen clearly. Usually with normal use once everyday through the week each protector last about a month and a half. Cheap insurance!
If your interested I will dig up the link to the ones I use.