The Ipod Touch is a lovely piece of engineering, however they have locked it down rather well so that you can't add new applications.

So...the clever people at ipodtouchhacks have created a nice 2 min tutorial on how to break your touch free from it's shackles it was born with.

And then once your touch is free, the next thing you need is to make phone calls. Bring on the touchmods VOIP SIP client and microphone, very sweet.