I’ll try…I don’t have a touch but I do have an iPod and a iPhone.
[li] Do I have to use iTunes or is there an alternative?[/li]You don’t have to but it’s recommended. The popular alternative is called amarok…from what I understand, winamp and many others have plug ins. I wouldn’t discount iTunes because it’s from apple and they r teh suxxors. There are many who use iTunes and are happy with it. I’ve been thru a few of the alternatives and keep coming back.
[li] Can I just fling over files and install them on it like with windows-mobile devices, or do I have to do some sort of bizarre and arcane install-on-synch bs?[/li]No, you’ll have to use an ‘arcane’ software that will allow you to automatically or manually synch media. Itunes uses an environment that allows you to sort, build smart playlists and have full control over what you put on your mobile device. If you jailbreak your iPod you will be free to manually drag media from your ultra modern windows OS using the premier tools that microsoft has provided for sorting/searching and otherwise managing your media
[li] What is the best (free) video encoder? Ideal settings?[/li]Handbrake, free, has presets for your iPod
[li] I see stuff encoded for PSP and Zune, m4p or something, that ok for ipod too?[/li]Possibly if they are in a format that is readable by your iPod. I’ve found that as long as the resolution is within the iPod specs, it will play it.
[li] What is the best book-reader? How are things with PDFs?[/li]I’m not familiar with readers but I have found that pdf is (natively?) supported. I use an app called air sharing which allows me to connect the device to my wireless network at home, drag pdfs into a network folder and read them thru the app.
[li] Can I only download/install apps from the store, or can I do it from sites?[/li]if you jailbreak you can install apps from where ever you find them. Again, the arcane iTunes store isn’t likely to have tons of free certified apps that can be used without jailbreaking your device.
Sorry for the snark, IMHO iTunes and the ITMS are a reasonable software suite for managing your device, I get that there are many that think that it’s all bloatware but these guys have spent millions to make a serviceable and accessible software that is usable even for the noobs. There is a very good reason why they have their market share.
That being said, you may consider evaluating the software and services they provide to manage their device before you consider jail breaking it .