It isn't really possible to use an iPod Touch for this purpose without doing some serious hackery.
However, Apple has announced they will be releasing an SDK to developer
for the iPhone in February. That SDK should make the sort of thing you're describing possible, even relatively trivial for a programmer already familiar with Apple's OS X APIs. The iPod Touch appears to be a variation/subset of the iPhone, so the SDK for the iPhone probably would mostly apply to the iPod Touch at a technical level. But that does not mean that Apple is going to permit developers to
deploy custom applications on the iPod Touch. The iPod and iPhone lines are very distinct businesses for Apple.
The big advantage I see to using an iPhone or iPod Touch for what you're describing is that it's an extremely portable, high dpi display. It's even
color managed! On the down-side, it's a very small screen, so it might be easier to simply set the art director up with a laptop.