If I sell my iPod touch with all the games and apps that I bought on the app store, will the other person be able to use them and still put his own music on it?

Nope. Not that I know of. Not only will the new computer erase all music, pics, videos, apps, etc. but it’s also not a very good idea to sell an electronic with any of your information on it. First because I think it’s a good selling point to have it wiped clean rather than with a bunch of random apps but also because some apps can store info that you don’t want other people to know. My advice: wipe the memory and restore all settings so it feels out-of-the-box-new for the buyer.

http://www.iphoneatlas.com:80/2008/06/02/preparing-your-iphone-for-resale/

Apps purchased for and on an iPhone are tied to the user’s iTunes account. When a user takes an iPhone and tries to sync it to a new computer (in the case of a sale and transfer of hardware), the iTunes software on their system will require them to login to their user account; in addition, when they first perform a sync, any media (music, apps, movies) not associated with that user account will be lost in the first sync. It’s an automatic warning that pops up essentially telling that user that their iPhone will be restored when they perform a sync.

It goes the same for iPods, iPod Touch, etc. If you ever try to “add music” from another library (another computer with other tunes), iTunes pops up with a warning essentially saying that your iPod can only sync to one library-do you wish to proceed (and erase/sync to the new media).