I read that with the new ipod's not all of the older accesories work still, engadget had it but was a bit vague in what worked and didnt. Not sure if it will work with the itouch.

http://www.ilounge.com/index.php/ipod/review/kensington-digital-fm-transmitter-auto-charger-for-ipod-ipod/P50/

Does that product work, it says on their official website "System Requirements
Compatible with any iPod with dock connector including new iPod nano and video."

Thanks.