lol, I don't which is best, but I know some video converters could work.
well, most video converter has a free version and pro version. but for some, key functions are pretty stricted to the Pro, like ******* Free Video Converter, and some are comparatively less limited. For example, Sothink Free Video Converter that I used for a while. It has the same features as the Pro, only HD videos not included. Of course it supports video to iPod touch, and it has iPod touch output specifically listed.
You could have a try. ;]