For reference, I've had both the ipod touch (2g) and the N810. My initial impression was that I'd definitely keep the ipod touch and eBay the N810, but I ended up doing the exact opposite. The N810 definitely benefits from various tweaks -- it's a linux distro based off Debian (afaik), and various sysctl tweaks along with microb/webkit tweaks made it a very nice browser. Here are my impressions on both systems:

Ipod touch --
Pros: really good for multimedia with decent browsing and a ton of apps.
Cons: locked down (unless you jail break) which means that simple tasks such as storing PDFs is a major chore. Also no BT tethering, which means that it's worthless outside of a WiFi spot.

N810:
Pros: very open architecture and if you have any linux experience you'll feel right at home (running bash with the expected FS layout and the usual editors - vi, emacs, etc). Once you've taken the time to do some minor (or major depending on your skill-level and patience) tweaking, it's a very nice device. Fantastic screen, great browsing and very usable for reading (I've read various technical PDFs, HTML articles saved on SD, ePub books, etc). I don't use it for audio as I have an old ipod nano that handles that task, and I don't view a lot of videos (the occasional youtube video is handled just fine by the N810).

Summary: if you're looking for an ipod with some websurfing abilities then go with the ipod touch. It's a pretty well made device and I certainly enjoyed using it. However, if you're looking for something that could realistically function as a laptop in a pinch and has an awesome screen, then the N810 is a great device. I carry it around along with my BB to make up for the various deficiencies of the BB (lousy screen, horrible browsing, etc... though the BB rocks for email and that's it's main duty for me). The fact that you can pair the N810 with a bluetooth device for net access is also a major bonus.

Anyhow, apologies for the rambling post, but the bottomline is that the N810 is the most pocketable MID out there right now and it'll handle your net activities (from surfing to VNC to ssh) along with serving as a decent ereader and a multimedia device if needed.

-CM