I've been fielding some questions today about the best solution for students who would like to listen to books read aloud using an iPod touch. I'm reposting my response below with a few additions and links. Please comment if you have suggestions or ideas to share.
The Vbookz app would be a great option for students who want to read and listen to books like Huck Finn, Dracula, Pride and Predjudice etc. The app is a full ebook reader plus text-to-speech engine. It even magnifies the words as they are being read to help the reader track words as they are read aloud. The app gives you access to over 30,000 books for free download once installed ($1.99 for the app). Here’s a Youtube video explaining the app.
Another suggestion is to browse this list of free audio/ebooks for the iPod touch on Appolicious. I've downloaded the Wind in the Willows app and found that it works quite well. My only wish is that it included word tracking.
I also recommend checking out Lit2go which has hundreds of books read by actors in Mp3 format. Like Vbookz these are public domain books which are no longer covered by copyright law. These Mp3 files and the text can be viewed on a computer or downloaded and added to an ipod touch.
Finally, I highly recommend checking with your local library online services to see if they are using a service like Overdrive.com which allows you to check out ebooks and audio books using your library card. You can check for libraries using Overdrive.com by entering your area code I used my local library card to check out the audio book version of The Giver by Lois Lowry which students in 10th Grade ELA have been reading at my school.