If you haven't heard about this process
I've heard about the process (Senuti is my fave), but fortunately never personally had to copy music back from my iPods because all my music is in my iTunes Library, where it should be, and I also do regular backups to DVD (which are kept in a separate location).
I've invested too much time and money in my iTunes Library to just keep it in one location (my iPod).
But I was trying to make a point about the importance of backing up your music. Some people have thousands of £££/$$$ worth.
Also, if you've transferred photos, the Pod touch only keeps low-res versions of the originals, so copying those back wouldn't help much if you only kept your photos on the iPod.