Yes you can, i did it with mine a couple months ago. Hacking it can be quite troublesome if you do not know what you are doing. Currently i have over 50 installed and it barely takes up any memory. PM if you want some more info on putting games on your ipod
If at first you don't succeed, failure may be your thing-Warren Miller
in an hour the new update for the iphone and touch comes out (2.0) which includes an application store. You can buy all sorts of sweet apps, including games like super monkey ball, and lots of other cool ones.
Or another way of doing it is jailbreaking your iPod. Jailbreaking is basically enabling third party applications (games and such) to be installed on your iPod.
If you google "jail break my iPod touch" you'll get some good results. The instructions on how to do it will be on the webpage you download the jailbreak from.
www.ipodtouchfans.com will tell you everything you need. My ipod is jailbroken right now and it's pretty sick, but most of the games blow and are terrible quality. The only games that I actually play are gameboy games on an emulator.
Which is why the new update is awesome because theres a ton of really good games made by actual game developers, so they're all super high quality