Before I jailbroke my Ipod touch, I upgraded to 2.02 and got App Store. I downloaded plenty of free apps, and even purchaced some (dynolicious, crash cart etc). The thing I was the MOST worried about was losing the programs I paid for. So I backed them up into a seperate folder, not really even knowing if it was the actual program or not, and jailbroke it.
After many attemps at jailbreaking my iPod it finally worked. And after I let iTunes restore my ipod I got all my programs back. It even even transfered all of my mail, and my wifi settings. So I now have Cydia, Installer, and App Store. I have the option to still pay for apps, or get them for free.
Needless to say, I wish I jailbroke it a long time ago. Now I have terminal, so I can telnet and ping which is what I use quite frequently.