It is most certainty not a software upgrade, it is a hardware issue, but I also suspect that it sucks in a lot more battery power, and there isn't really a need for it, as after all, it is a mobile device.
Okay, I guess experience tells best, I don't have a N-router, just a crappy G, so I guess that when using a G on an N there is a noticeable difference.The best reason for having WiFi n on the touch (or iPhone or any other portable device) is that if you connect a non-N device to a WiFi N network, performance of the whole network drops dramatically. I've got round the issue by having two separate WiFi networks (One N and one G) but it would be easier just to have one!