OK, I've been using the new apps on my iPod touch for a few days now and I'm still of the opinion that 80% of them are pretty dismal. However, the email app is pretty good and makes the $20 upgrade fee easier to swallow.
The email client is actually pretty good. It's quick to access, easy to set up and works pretty well. If you're using GMail, Yahoo! Mail, .mac mail or AOL then setup is easy. If not, then it's not much bother to set up access to you IMAP, POP or Exchange email. I'm also impressed that you can have multiple email accounts on the one device - I was worried that the email client would be crippled.
So, is the update worth $20? Well, if you want access to your email from your iPod touch (and you can't to that via webmail via Safari) then yes, it's worth the money. The app is pretty well thought out, is robust and works well (although a few more features, such as the ability to mark all as read/unread, would be handy).
However, I still think that this stuff should have shipped with the iPod touch right from the start.
What the iPod touch now really needs is a password manager - that I'd pay $20 for.