Is using my iPod touch always plugged in an OK thing to do?
It'll probably be fine.


If it's always plugged in, you won't notice any battery decay because the device will always be charged (or pulling off mains power) when you need it.
Any battery decay will probably take long enough that it'll be time to buy a new iPod by the time you notice anything severe.


The easiest way to mitigate this I can think of is to unplug the device over the weekend, remove it from the car, and let it discharge on its own. Then, on Monday, plug it back in and go. This has the added advantage that it's not subjected to the temperature extremes the interior of a car can see over a period of extended non-use.