Apple followed up their iPhone firmware update with the iPod touch 1.1.1 update, described as "bug fixes". It's far from a major update, but so far I've noticed a more responsive UI, especially when rotating the iPod between vertical and horizontal orientation (I had to shake the iPod a little in the past to get the screen to rotate with the iPod). No new programs seem to be added and the calendar still functions the same way (can't add events from the iPod). It's also rumored that the fix improves the early batch of defective screens, but that has yet to be confirmed. [MacRumors]
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Screen's better... not 100%. It's a good enough fix that I probably won't go to the store and swap it for a new one. Then again... the only video I have on there right now is K-Ville and thats pretty unwatchable no matter what the screen does.