Yea, it's made by apple and it's already on your phone.
Check out the menu under the timer settings, one of the sound options is called "Sleep iPod".
Sorry, not sure if this applies to the iPod...
Me? Actually, I have a case I really like but the sleep button is iffy and I remembered my old pda's launcher having this feature and thought I might get a straight answer.
Just use the Clock app and set it to turn off at midnight so you don't have to worry about forgetting to turn off you ipod touch and leave your ipod touch playing music or doing its thing.