It looks like iPod touch hacker Niacin has achieved read access to the iPod touch root. Following up on the iPhone jailbreak earlier today, this is another step forward into opening up both the iPhone and iPod touch for general read-write access and third party application support. More news as it develops.
Niacin has been working with Dre and the entire iPhone/iPod touch dev team to make this happen.
Update: Niacin confirms that the TIFF exploit exposes the root partition for both the iPhone and iPod touch.