I have several Nokia internet tablets that I use as a wireless touchscreen in my set up. These would be similar to an iPod unit (except with a slightly larger screen and more customizations available). As much as I like them, they are not really practical in many settings. So here is my 2cents based on my use of the Nokia already.
#1 - the screen is just too small - even with the Nokia. It certainly isn't as convienent as a hard button remote for general TV useage, etc. It is nice to use to pick CDs or movies, etc. using the full featured touchscreen, but then having a hard button remote is very nice to change the volume, channels, etc. I think you really need a 7-8" screen to be effective as a primary interface as well.
#2 - Power consumption and docking stations - the Nokia's don't have a docking station which is a real bitch. You have to remember to plug it in so it isn't dead the next time someone uses it. The iPod would probably be better in this category because of all the accessories available. But I'm not sure if anyone sells a power only dock, most are docking stations. So you'll end up paying for a full docking station when you just want an easy way to get power to the iPod.
#3 - Noise - the Nokia and iPod run silently which is a real plus. I just bought another UMPC and while it is really nice with a large screen and docking station, it has a fan which is noticable. Not a great solution IMHO.
#4 - Price - both can be had for around $200 which is a pretty good price. I'd love to see prices drop more, but that isn't a bad price for a wireless touchscreen IMHO.
But I think the perfect touchscreen is going to have a 7-8" touchscreen, be wireless for easy use and have a docking station to get power, and be 100% silent. I think there are solutions out there like this, but they have the 2k price tags on them.

So until prices drop considerably, I'll have to live with less than perfect solutions.