Since upgrade to iOS 4.2 on my iPod Touch 2nd gen, I found one problem with battery. After fully charged and unplugged, the battery drains quickly even when I do nothing with it. Follow this steps seem to help...
1. Turn off Wi-Fi
2. Turn off push mail
3. Turn off auto fetch of email
4. Turn off push notification
http://www.apple.com/batteries/ipods.html