Here is a guide to the relevant iPod Touch Music Settings.
Changing the iPod Touch's Music
Even though the iPod Touch is known for having the diversity of applications, games, internet, and video functions, it still is tied to the main thing that the iPod is known for: music. For most people the iPod Touch is going to be primarily a music player, while all the other complete functions are merely secondary. With this you are meant to maintain much of the customization and control that you have traditionally had in the iPod as it refers to music, though the interface and design is quite difference. Like many aspects of the iPod Touch, you can change much of this in the Music Settings.
iPod Touch Settings Option
Start by selecting the Settings option from the iPod Touch's desktop. Go to the second section inside the iPod Touch Settings and find Music, which is under General and above Video. Inside the iPod Touch Music Settings you will have four options. The top one is Sound Check, which you can leave in the Off position or set to On. This is a feature to estimate sound and is never really necessary to keep On. Below that is the Audiobook Speed, which you set to see how fast an audiobook plays. This only has three real settings and Normal, which is the default, is the most practical. This really will only affect specific audiobooks that are bought through sources like iTunes. The next option is EQ where you can set the balance to highlight certain sounds or atune it to different musical genres. If you do not want to have to change it often for different music then keep it off. There are a few dozen options ranging from genre specific options to those that reduce or enhance certain sounds. You are going to have to test this out to see what is best on average for you. Below that is Volume Limit, which stops the volume from going over a certain level. This is great if you are playing your iPod Touch at a party and want to make sure it will not get too loud.
iPod Touch iPod Section
Other than the iPod Touch Music Settings you will change everything inside the actual iPod Touch iPod section. Here you can select to put each album on random, set songs to automatically repeat, shuffle tracks, and do more. These are all a direct musical play interface and are not a base Music Setting.