I have a griffin clear case but, i hardly ever use it because i like my ipod touch naked. it just looks so much better and I dont like that the case adds more bulk to it. But, it offers solid protection nonetheless.
I picked up a DLO Jam Jacket the other day. It's all rubbery and great for people like me who drop things. Link below says iPhone but fits perfectly for the touch. I'm very satisfied.
My brother has the DLO. He absolutely loves it, and the fact that the headphones aren't ever in the way is great.
For me, though, I really wanted a clear, thin case; something that wouldn't inhibit the thinness of the Touch, while keeping it looking good. I went with the Griffin iClear for the Touch, and I love it. It's easy to get in and out of, and has done a fantastic job keeping it safe. When I look at all the scratches on the case, all I can think about is the fact that those AREN'T on my beautiful iPod!
NOTE: Worth mentioning, though, when dust or other particles get under the case, they get stuck there until they are cleaned out. That may bother some folks, particularly the OCD Apple crowd