This Instructable was born of a student's panic when he lost his iPod Touch full of personal data, and was afraid he'd never get it back.
The Instructable is quick and easy to do, requires no extra apps, and could save you a lot of money and heartache.
Step 1: A Quick Note
There are two steps to this instructable - displaying a contact method on your iPod's screen, and stopping anybody from going beyond that point.
First, use your iPod's Notes function to type in your contact details.
It is not a good idea to use your real name and address, so instead use a simple email address or a phone number you don't mind being shared amongst strangers. Type it a few lines down the screen, so that it ends up clearly visible on the "Lock" screen.
If my sons take their iPods on school trips, they use the school's contact details.
Take a screen-shot of the note by holding in the power button and pressing the home button.