They changed the now #1 music app so that it now works on the original iPod touch. It only worked for me after redownloading and resyncing.
http://itunes.apple.com/WebObjects/MZStore.woa/wa/viewSoftware?id=317951436&mt=8
http://itunes.apple.com/WebObjects/MZStore.woa/wa/viewSoftware?id=317951436&mt=8