Just got the Otterbox Defender in for the Touch.
The case is well made and fits perfectly around the Touch. It snaps together with clips on the side and top and bottom. On top of that you pull over, for lack of a better description, the outer silicon skin. It fits over the entire unit except for the screen. There are holders, for lack of a better term, on the sides and top that grip the silicon skin and keep it from moving.
The membrane over the screen is just a hair above it. So, you must tap the screen and it works just fine. I do not have any problems using it. Now, if you were trying to draw, I could foresee a problem.
Is your Touch protected? You bet. I used an iClear before this and although I like it, it was slippery at times and I tended to really grip the Touch. When handing it to someone I was a bit leery. You are not going to lose your grip with this covering. I have never seen anything like it. It grips, but can be wiped off, no lint, etc sticking to it. I'm impressed.
Is it worth $29? I think so. Will everyone like it, I don't think so, but I payed $400 for this and I use it all the time since it has been jailbroken and I tend to drop things at one time or another. Right now it is staying on the Touch. I might change my mind later, but right now I do not see anything I would replace it with.