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I have an iphone, which is similar to an ipod touch but with a phone and camera in it.
It is a great system. Sure, itunes has its faults. For me, every now and then the library file corrupts and when I open itunes, I suddenly have no music. I have to restore the library file to a previous version and all is good. Total pain in the arse.
However, the user interface is great. The apps store is also good. There are many free apps, and lots of very cheap apps. They really increase the usefulness of the device. Games, utilities, etc. Great stuff.
It is not perfect, but with regards to the devices that I have tried, I haven't found one better.
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