It could be that they have brought a new bank of servers online with the updates. When it can connect there, you get the 2.0 Update is available message. But, when you try to go to the iTunes store it is overloaded and just can't be reached. I'm guessing that when you select "Learn More" it is really just taking you to the iPod Touch Landing Page, just like when you go from the apple.com. (A LOT more info is pushed when you connect to the store as opposed to just checking for an update.)
My guess is that eventually the new servers get overloaded and go offline, returning to the old 1.1.4 servers.
I think they really are just overloaded, especially when you read about the problems they are having at all the stores getting stuff registered. Remember, at 8am EDT, you could click on the iPod Touch Landing Page link and just get redirected to the Itunes store. Then, around 8am CDT, that stopped working. Around the same time, all of a sudden people started getting the 2.0 is available message. And, the rest of the country (besides us, of course) started waking up.
Just a thought to explain the erratic behavior.