Yes you can use an external mic. Some are in the Apple store. You can also Google mic for iPod touch. The 3G and 2G iPod came with a combination earphone/mic since those iPod did not come with a intrnal mic. I do not know if the 1G cam with the combination earphone/mic.
I have the voice memo app on the screen but when I go to use it it says "No Microphone Available. Connect a microphone to record voice memos." I would purchase an external microphone but will it just work if I plug it in?