I'm pretty sure you need two things to make this work for you:
Apple Component Audio/Video Cable ($50)
Component Video to DVI or VGA adaptor (?)
The adaptor might be hard to come by but I know they exist. A little Google searching and you should be able to find one.
Not sure what your intended use is but remember that the iPod Touch/iPhone will only output videos (those on the iPod, YouTube, Quicktime videos in Safari, etc) and display photos. If you're looking for your monitor to mirror the iPod Touch's screen to view apps you would need to jailbreak and use either the ScreenSplitr or TVOUT apps.