If not using Windows, post back with your OS and I'll find apps for you.
I tried embedding this video but it didn't work sorry, go here to watch a tutorial which should work for you, again any questions come back to AnswerBank or start a new question for specifics:
The Windows port of it isn't as good, but Videora seems pretty good (linked to by above poster).
Convert to a mp4 file for the iPod Touch or iPhone, then drag that file into iTunes. Tell iTunes to sync films when you connect your iPod, and it should work.