While Apple has yet to deny or confirm, a few owners of the new iPhone 3GS have complained about the device heating up, even to the point of warping the plastic and discoloring the white-backed phones. There have been problems with batteries in Apple devices before (Sony-made batteries, to be specific).
I currently own an iPod Touch (1st gen) with 16 GB on board, and even when the original turned into a brick following the original 2.0 software upgrade, Apple made good with a new device at no cost. But now there’s some suggestion that the 3GS may not be having a battery problem; 2nd gen owners of the iPod Touch have noticed a shortened battery life and hotter device since upgrading to the iPhone 3.0 software upgrade (that same one that iTunes keeps begging me to spend $10 on every time I sync up).
Recommendation: Sound an awful lot like a power management issue. I’d hold off on both for just a while if you have or want an iPhone.