Apps
Most of the apps available for iphone are available for itouch. You can use the skype app to add voip to the touch but it's not perfect. You can use popular dedicated mobile apps like ebay and amazon to do your shopping easily on those sites. If you have a msn account you can pay for an app to have that on your itouch so you can keep in touch with your msn buddies. The instagram app allows you to add photo effects to your photos making them look like they were taken by an 80's camera, it's a trendy thing to do. Facebook connectivity is available for those folks who are addicted to social networking. You can download work out apps which help you lose weight, tracking your calorie intake and how many steps you take with the built in accelerometer. Get up to date news from the internet or even watch youtube clips from your device. Another cool thing is that you can get content from sky tv or even watch terrestrial tv. There are a bunch of game apps available and a very easy to download stuff from the apps icon.

One of the downsides is that it doesn't use 3g, so you have to always be near a wireless network to browse the internet, use apps that require internet connectivity or get on itunes.

Battery
Battery life is decent, obviously it is better than an iphone, if you turn off all the update services and non essential background programs it could last more than a day on one charge. Screen brightness has alot to do with battery life, i turn my down to the lowest and it conserves alot of power.

Camera
You can take decent pictures with the touch, the quality is not as good as the iphone's but the video is not bad. There is a front and back camera so you can use it for video conference as well.

Audio
The only slight let down is the external speakers, it doesn't sound all that well, you can remedy this by plugging in earphones or using an external speaker plugged into the earphone jack.

itunes
itunes is unfortunately a substandard program which you need in order to sync up with your touch. When i say it is substandard i mean that it is sometimes laggy and fiddly to use. This would be the main weakness to all Apple products. If you don't have a PC or a Mac from which to run itunes then your ability to use your touch is effectively limited. Itunes is like a giant filter from which you try and push through your pictures, videos and music to transfer them across to your ipod products. It is unneccesarily fidly and can be downright frustrating. As long as you don't try to do anything more advanced than transfering songs then you should be fine, anything more and you need to tinker with it a bit more.

Video formats
Another downside is that the touch will only play certain video formats, you can get secondary programs out there that renecode videos for you but again it's kind of a hassle. Unlike other video players which can play a number of files, apple only lets you play files that are encoded through itunes this is unnessarily fiddly again.

Final thoughts
I got the 64gb version, i have all my music on there and a few videos and i have used about half of the capacity. Overall this is a great gadget.