Some reports are coming in from users that are trying to update their Apps in iTunes 8.0 with a iPod Touch that it’s simply not working. Users are getting error 5002 (Unknown Error). The solution to this problem is quite easy. It’s in fact not a solution but more a workaround.
The best thing you try to do is to update the apps from the iPod Touch and then sync your iPod Touch with iTunes 8. ITunes 8 will normally transfers the purchases back to your iTunes library on your computer.
Please keep in mind that when you are updating large app’s the risk is still there that your device crashes and gives you the Apple Screen of Death!. If that would happen and you have a jailbroken device, we have another workaround here.
Follow the discussion on the Apple Forum.
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\\ tags: crash, error 5002, ipod touch, iTunes 8.0, swod

This isn’t just the iPod Touch, as I get it with my iPhone too. :(
as of sept 14, the workaround is also useless, apps wont download to the touch either
http://discussions.apple.com/thread.jspa?messageID=8085756&tstart=0