There is good music video making apps for iPod touch which the Harmonicdog MultiTrack DAW. It is pretty amazing in that you can record a lot of movies and tracks at a go. You can also listen to the tracks through the headphones.
VidEditorFree. It does a bunch of short videos and you can rearrange them to make a big music video. The problem is that you cant add music for free. Music adding costs 99 cents but it is an overall good video making app!!