Chaos Rings- iPod exclusive JRPG by Square Enix, has four sets of playable characters, each with their own storyline. A fairly simple turn-based battling system is easy to pick up, yet complicated enough to challenge. The bosses are epic, the screenplay is superb, writing is magnificent, and the music is boss. Has fantastic replay value and several secrets as well. Runs around $15, but gave me just as much playtime as several of my better Wii offerings that I got for $50. Has a prequel that is in the same vein, and is quite harder, worth picking up if you enjoy the first. Runs around $13.
Zenonia (series) - These games are fantastic. I recommend buying the first two games, since those are glorious, and if you love those, pick up the third. I haven't played the fourth due to compatibility issues, but it is free currently, so I'd recommend downloading it and putting it off if you can. Each game runs around $3 currently, less for the earlier ones. The series is an action-based RPG, with a top-down view and lots of classic action battling. It has sidequests aplenty, and the writing is quite good, especially when they reference other games oddly. Zenonia 1 gave me 70 hours of gameplay to get to Lvl 99 and 100% it, same with Zenonia 2.
Those two above are must-buys for a guy actually trying to game on an iPod.