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The menu does not show the wallpaper. Its only when the iPod is locked and not plugged in that it shows the wallpaper. Just like on the iPhone.

I disagree. I've had wallpaper behind the menu (no hacks) since I got my iTouch in Novemeber. It is only since I updated to 1.1.4 that it has gone missing.
 
I disagree. I've had wallpaper behind the menu (no hacks) since I got my iTouch in Novemeber. It is only since I updated to 1.1.4 that it has gone missing.

I re-disagree. Along with about 20 people I know with the iPod Touch, I also only have wallpaper on the "Slide to Unlock" screen. I've never heard of having the wallpaper on the main menu without some type of hacks.
 
normally, wall paper will only show up on the slide to unlock screen. if you jailbreak it and install summerboard, you can have wallpaper on the main springboard where all your apps are.
 
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