Hi Shad45,
Thanks for the appreciation.
You can definitely delete downloaded files. To do that goto File Manager, touch the plus icon situtated at the extreme right and without lifting your finger drag the selection to delete icon once the plus icon extends itself to delete a particular file or folder.
With Best Regards,
Digital Poke Crew
Thanks for that, I've only got the 8th iPod touch, so space is at a premium for me :d