I rarely use the remote except for Front Row movies, and that's only around twice a year, so can it be used for use on the iPods? I know that it won't work by just clicking it or whatever, but is there something I can do to make them compatible?
No, but you can use your ipod touch as a remote for your itunes or apple tv. Apple has a free app called Remote you can use for this, but you need Wifi to use it. However, I don't think there is a way to use the little remote that comes with the computer to access your ipod touch.
I have found that you can only adjust volume up and down or skip to next or previous tracks. Also you cannot access the menu system to choose playlists, albums etc.