I have a touch, but have never tried this on it. It worked perfectly on my iPod Photo, so I assume it will still be the same...
Go to iTunes, convert the file to M4A. Find the location of the file and rename the extension from ...m4a to ...m4b then re add it to iTunes.
The 'b' stands for 'bookmark' so it should be able to store the location when you sync it to your mac/pc.
I don't see why it wouldn't work, it has done on all previous iPods. (If it doesn't ... then sorry!).