Wow, there is definitely some very cool things you can do when hacking the Ipod Touch. My personal favorite is the echasketch application. Granted, it does not add any significant functionality to the device it is fun.
I have seen an Ipod Touch setup to run an apache webserver, which is incredibly cool, but I am not sure what the practical application is. That being said, my question is though you can add all types of cool applications, how many of them are beneficial on that device? I personally want my music, maybe a video or two, but how much more do you really need on the device?
Some of the practical add-ons I have seen include the google maps type applications, but since internet access is wifi and not cellular how functional are these types of apps. Typically if I have wifi access, I can quickly open up my laptop.
Ultimately, it is most certainly a fun toy and if you can swing the price tag you should get one!