My (office-provided) 5th gen iTouch (more akin to an iPhone 5) still is supported and has the same apps access as other iPhont (or universal iPad) apps. With the exceptions of those apps that are marked as requiring hardware my iPod doesn't have (calling).
Not having iPhones, I would probably get an iTouch. It's a pretty decent device. But kinda pointless if you have an iPhone.
Before I get asked, I'm a professional iOS 5 developer. That's why I have plenty iHardware around.
And to keep objective, between my iPhone 1 and my 4s, I skipped the 3G, 3GS and 4 while I used an atrocious alternative. Never again.