There is no problem with the Touch, it's your router.
I can offer assistance, should you be using a Linksys router. Otherwise, it would be wise to contact however made your router.
Quote:
For a Linksys router:
1) Open your browser. In the URL field, type in http://192.168.1.1 and let the page load.
2) A box will come up asking for a name and password. In the Name filed, input the word root, and leave the password filed blank. Click Connect.
3) Now displayed to you are several options. Under 'Security' you can change the type of Security your Router uses, such as DHCP or WPA. You want to select WPA or WPA Personal. You with then be asked to set a password. Input one that is secure and at least 8 digits long. Click 'OK' or 'Save'.
4) Now try to connect on your Touch. Upon connecting, you will be prompted for a password. Enter the one you just set, and you will be connected.
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Hope this helps you.
- John