Then I discovered the Tuneband for iPod Touch (2nd and 3rd Generation) Grantwood Technology's Armband, Silicone Skin, and Screen Protector.
It's new best friend. I received a pink one and totally love it. I no longer worry about breaking my ipod or having to hold it. Instead it sits securely on my arm with the armband in a cute pink protective case.
I love it so much I am getting one in a guy color for Phil for Christmas.
This would make a great stocking stuffer and can be purchased in a variety of colors on Amazon Here for between $7.99- $12.99 depending on the color.