Ive had my iPod Touch (2G) for almost two years now, and used this thing a lot. Probably a charge every 2-3 days now.. but for the first year I had it, it was probably every day.
I do see the battery indicator to be off though. I'll be surfing the web, get the 20% warning, and then maybe I'll watch a video and I'll get the 10% warning soon after. So I put the device on sleep mode and come back like an hour later, and my battery is no longer in red, and it looks like it's close to 30% battery life. I don't get it.