The Ipod touch is easier to carry in your pocket. Also next month Apple will officially support third party applications. On the other hand it has no bluetooth unlike the n800, so you can't use an external keyboard or tether a phone, the screen is as you said not as good as the n800, and you can't use a stylus to write notes.

The n800 isn't perfect either. Installing applications on the n800 can be a hassle, some applications are half-finished, but you can directly communicate with the developers here and ask for a feature. The games are somewhat limited, maily older gameboy titles and quake/doom.

Here is an interesting side-by side comparison by Thoughtfix, who also visits this forum.