Out of my collection I can highly recommend:
iPint ... everyone who's never seen it loves it. And its free.
Penguin Lite 1 & 2 ... good fun game with a beefy free demo.
Ragdoll Lite ... physics-based puzzling game, again free.
Lightsaber ... you know you want to.
Sonic the Hedgehog is a bitch to control on the touch screen though.
There's a decent Lite version of Assassin's Creed too.
BClassic Lite ... fun Breakout clone.
Pac-Man ... nuff said.
This may seem a bit weird me suggesting stuff but I've been collecting free stuff for when I do decide to buy the ipod touch (Not buying the 8GB as its a rip off and I want the base model). Note I haven't tested anything but as they're free it's not like its expensive to try it out
Action Method (linked with behance)
Documents to Go (free or pay)
flashlight (its a torch)
Upcode or beetag - they read qr codes (the square grid codes on pepsi etc)
remote ( and the keynote one)
invoice to go
pingdom (keeps track of your site uptime)
network (for the pc work side of things)
mint stats (php stats meter thingy)
mocha vnc lite
mobile me idisk