If you are using a third-party router, you should use the WPA key that is generated after you type in your passphrase on the router. If you type in "subscriptions" as your passphrase, a key will be generated that is usually 26 letters in length. It will be a combination of capital letters, lower case letters and numbers. It is a pain to type in correctly, especially since the Touch only gives you a brief second to see if you are typing the information in accurately.
Also, on your router, if you are using WPA you might want to change to TKIP; if you are using WPA2, you should use AES. If you do have a setting on your router that allows for both, then use that. Right now I am using AES with WPA2 from a Linksys N-Router and I can connect to my Touch.
If you have MAC address filtering enabled on your router, don't forget that you must enter the MAC address that is on your Touch into the router in order to get access.