A recent Endgadget article put an interesting spin on the whole iPhone / iPod game phenomenon. In a survey, most touch owners admitted that they didn't bother with most of their applications, and deleted them after only a day of twiddling.
Most games are very reasonably priced indeed. For less than the cost of a pint you can grab some seriously excellent little diversions for your favourite flavour of touch device, but with that cheap price comes the caveat emptor - most games are either ridiculously shallow and don't really hold up very well to long-term play, or just don't work because of the "uniqueness" of the control method you need to use to manipulate them - either touch or accelerometer tilt stuff. Not always the best method of control for a device that relies on you being able to see the screen or what you're doing.