Quick iPod Touch on why iPod Touch might not remember your Wi-Fi Password. Basically when you connect first time to your router via iPod Touch, your iPod Touch should remember WiFi password, but sometimes it does not. And that sometimes is when you set it to WPA-2 WPA encryption. For some reason it has problem and mostly I have noticed that with later firmware's than 3.0.
To fix it, just go to
Type in your WPA password, site will give you HEX characters.
Type HEX password in your iPod Touch when asked for your network login, and it should remember the password this time.