First off...there's an iPod Touch, but I've yet to see an iTouch. iTouch sounds like something dirty.

Second, while this is a great idea in theory, by the time you download a video (especially over 3G if allowed, but WiFi also) your battery would be gone. So unless they are somehow upping the battery life 10-fold or giving us on-the-fly battery swappage, I don't see any use for this.