I recently installed the latest software update for my iPod Touch and I am loving it! the extra features you can get are amazing. The ability to use active sync to connect to your mobile information server and receive your Exchange Emails, calendar items and contacts is brill.
Also the AppStore is also very good and being able to install new apps on your Touch so easily without having to Jail Break it. One of the apps that I am using a lot just now is the Remote (it is a free app) and basically you can remote control your iTunes Library that is on your PC from your Touch or iPhone through your home wireless network.
I would really say the Update is worth the £5.99 for Touch owners to buy (iPhone owners get it free). The only downside is that it does use up your battery far quicker than it did prior to the update and also you have a little less space once installed.
On the whole it is a good update and great add on to the Touch.