Don't waste your money. The iPad 2 may be a little bigger and a little faster, but I have a 2nd gen iTouch and still can't bring myself to fork over $500 for the low-end version. Oh it does have a camera, if you want to run around taking pictures with something that looks like half a laptop. 4th gen iTouch is a way better option in my opinion and it fits in your pocket.
Like anything, it depends on your needs. The iPad's screen is a lot bigger, and that larger screen can make a huge difference for running many applications, much more than most people who have not worked with an iPad think to be the case.
For me, an iPod touch which it's small screen would be a "waste of money", but an iPod touch suits others perfectly. Every user has to decide for himself or herself what is most important.
I think it is a matter of needs, but also you'll see that the iPad has a pixel per inch resolution of 132 ppi vs the 326 of the ipod touch, this makes for a far higher viewing resolution on the touch. There are rumours that the ipad may soon have a higher resolution looking at other forums and the retina display the ipad doesn't have.
I'd like to be able to compare the products side by side and you just can't do this.