Ok.... I am back up and running! After 3 phone calls to Apple Care and about 6 hours of troubleshooting I am all back to normal....
My particular situtation wasn't exactly what I thought it was.... My initial thought on the source of my issue was the iOS5.0.1 upgrade.... as it turned out I needed to reinstall iOS 5.0.1 and change the radio channel settings on my airport extreme.
Since I have multiple wireless devices in my house, Apple said that with the iOS 5 upgrade and the update to the firmware of my router, that interference could happen.
So the long-short of my resolution....by the way the iOS 5 supervising manager Jonathon spent over an hour walking me thru and then sent to the Wireless/Airport Extreme supervisor to adjust my rounter.... both of these guys were remarkeably patient and extremely knowledgeable.
1. Restore my iPod and reinstall iOS5 and restore my backed up info.
2. Go into Airport Utility App and manually set up the router.
a. Manual Set Up
b. Summary page select the wireless tab
c. Radio Channel Selection - Manual - Edit
d. Change both channels to something different that what they are currently set.
e. Update and Save your new settings.
f. Restart all devices you are trying to connect to via your router.
g. Back online and flying.
I must say that I was beginning to lose faith in why I re-invested my technology in Apple then Supervisor Jonathon and Travis were patient and knew the proper steps to get me back up and running.
My conclusion be being knocked offline on my iPod Touch wasn't just the upgrade to iOS5, it was also the firmware upgrade to my Airport Extreme and the channel selection.
After having a fully functional iOS 5 for a day now I am real happy with all the new features.
I hope this helps those of you still struggling to get iOS5 up and running.