Interesting comment by Alex and maybe new ipod touch trick with new firmware 1.1.2
"From what I have found the firmware version is 1.1.2 not 1.1.2 and only for the iphone so far.
I have not heard this mentioned anywhere yet, all of the videos on dailymotion.com work on the ipod touch. just wait for the little "play icon to show up.""
Can somebody try that today and see if it works?
go to www.dailymotion.com view some video wait a little bit and videos should work.
Please leave a comment for the rest of us.
So that means not only youtube videos but dailymotion, google, megavideo and other video sites will work as well.
UPDATE: Two commentators reported back, it works with version 1.1.1 and 1.1.2 !!!!! Please check the comments for more info from visitors and touch owners "Thank you Roh!"