Apple appears to have upped the processing speed of the iPod Touch in order to help it go after the portable-game market.
Touch Arcade reports that the applications processor inside the second-generation iPod Touch unveiled in September is actually running faster than the processor inside the iPhone 3G, which runs at the same speed that the original iPhone and iPod Touch used. The new iPod Touch's ARM-based processor is running at 532MHz, while the iPhone 3G's processor runs at 412MHz.
A game developer interviewed by Touch Arcade noticed a huge difference in 3D-rendering speed as a result of the speed bump. As we remember fondly from our "megahertz madness" days of the Intel-AMD competition in the PC, processor speed is not the only measure of performance, but it is an important one.
With the arrival of the App Store, Apple has been marketing the latest iPod Touch as a gaming device in its latest round of commercials, almost completely ignoring the fact that it's a music and video player as well.
It seems that Apple has room to boost the clock speed of the processor to 620MHz, according to ARM's specifications, but that requires striking a balance between performance and battery life.