A friend of mine just got her son one about 2 weeks ago for his 10th birthday. The first major breakthrough has been that he is exploring the camera. He will take videos and pictures of people and then study them, and he will turn the camera on himself and say things and then listen to what he has said, and he is imitating dancing and singing now.
Several of my son's friends with autism have ipod touches. They actually love trading ipods and exploring what kind of apps their friends have. We just came back from an autism group cruise and the first thing we had to do was find Peggle and download it, while another mom had to get Monkeyball for her son because of us. Of course we all have tons of autism apps...but thats not what they gravitate toward.