I think it's absolutely wonderful that in a time of crisis such as this, you're still so concerned with keeping your children happy. Good on you! And I say that if you can afford it, absolutely go with it!
And, as a "kid" myself, I think it's only right that I give you my opinion on moderation; The only time I would take the iPod Touches away from MY kids(as if I actually have any idea what I'm talking about), would be as punishment. As in:
DO: "You did not clean your room. Give me your iPod."
DO NOT: "Give me your iPod, you can have it back when you clean your room."
Just drawing from my own experience, because that's the way I always preferred it when I was not beyond arguing with my parents over cleaning my room.