I had another great idea come to me in a dream last night.
In my dream, my co-worker was showing me his iPod touch and a new application he installed on it. It made the touch screen into a telephone keypad and he could call people over VOIP. It basically made his iPod touch into an iPhone without the extra cost and service contracts.
A dongle that acts as a microphone would need to be acquired since the touch has no microphone. Without searching I think someone created this. But of course that was by hacking the iPod before Apple released the SDK. If you come up with this I would give it a shot.