I use mine to hold movies I have bought, generally ones that I've seen before and don't mind seeing again in a smaller screen size. Also TV shows, seasons of shows I liked well enough to buy. I keep the thing on my coffee table and when I need to babysit some updates or downloads or something on my laptop, I can just grab the iPod touch and pass the time watching a few scenes of some movie or TV episode. One eye on the laptop and the other on the iPod touch. Works for me.
Also I have a few complete time-wasters on there like Bejeweled for when some outfit's customer service process puts me on hold for ten minutes... mindless activity for mindless moments, seems only right. Keeps my temper in check, basically.