Why bother updating my iPod touch?
Depends on which version of iOS you're on. You gain all features and bug fixes implemented since then and possibly support running more software, or get more features with the software you have. The same as with any computer, really. This Wikipedia article might give you an idea.

If you're happy as-is, you might not want to bother. But don't come crying when a long-fixed bug, or maybe a hardware problem (no backups?), eats your music and apps.