Why is it that everytime I try to download, install, or update any app on my iPod Touch it just freezes and I have to put it in recovery mode?

…never heard of it before. Are you trying to install apps that require iPhone functions or what? Also, are they from the official store, or from jailbroken websites?

The worst “error” I’ve ever encountered was “Restart iPod, Uninstall App”.

Try restoring it and if that doesn’t work call Apple or scedule for the Genius Bar.

Be patient… the first time you synch with a bunch of new applications, it can take a long time… a seriously long time, and it looks like the progress bar is completely frozen. Set your ipod synching, and then go away and do something else for an hour. All future synchs will be really fast – it’s just the first one that’s the killer!

there’s an article in iphoneatlas.com referencing this issue (can’t link to it because I’m on my iPhone right now); it will also help if you update to 2.0.1 version through iTunes. As Shep mentioned, it does take a really long time the first time you install it, as well as the first time you sync.

You could also reduce the chance of freezes by removing previous backups via the preferences in iTunes (at lease for the iPhone-there’s a tab for Sync in prefs where you can remove previous backups, otherwise you’ll just be reinstalling the same backup that caused the crash in the first place).

I’ve had a lot of experience with this exact issue you’re describing, and it’s software not hardware related FYI (I was am early adopter of the iPhone 3G and even took my phone back to the Apple store and had them replace it, only to find the problem persist in my new phone).

Good luck, and update that version to 2.0.1!

Make an appointment with the Apple Genius bar. Sounds like you got a buggy iPod touch. Any number of things could be wrong with it – that’s certainly not normal behavior, and you might be able to find a fix for it online or by upgrading, but that’s not how the device should work- so take it back to Apple and get a brand new one. It’s not your job to figure out why the device they sold you doesn’t work the way it should. Have them replace it.

http://www.iphoneatlas.com/2008/08/07/white-apple-logo-screen-of-death-stops-iphones-in-their-tracks/

Here’s that article I mentioned above ^^. The issue really is related to the apps you have installed from the App Store; some of Apple’s quality assurance is in question, as no one has done “thorough testing” as to this problem and the underlying cause. 2.0.1 seems to be an improvement, but I have had to do the “restore” dance twice since installing it. Bottom line-only install the apps you intend to use, and if they are giving you grief, try re-downloading them from the App Store with iTunes.

I have also resorted to not updating apps via the iPhone (not updating in the App Store app on the iPhone, only updating with iTunes). A bit extreme, but hopefully this will all be resolved in the upcoming 2.1 firmware release.