Ipod touch 32 GB 3G seem to have issues with Wifi for me , and after searching on Google it looks like a common issue. But a lot of solutions offered online did not work for me. Though the speedtest.net App reported 3 Mbps + of download speed , Apps took ages to install and Youtube simply refused to play and buffered forever.
After trying various methods found online esp changing Wifi from g to b , which i did not want and changing some wifi settings and packet sizes. It did not resolve.
What i found worked for me was using a simple Proxy on my PC and connecting my Iphone to internet using that proxy. Everything seemed to work fine through the proxy ( but i have to keep my PC on ). Youtube plays without buffering, apps install within a few seconds and surfing is really fast.
The proxy i used was free proxy .
Thought might help someone since other techniques online did not resolve the issue for me.
BTW launchcast plays well on my Ipod touch in India , while it does not on normal PC due to ip restriction 
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