iOS 4 actually has an in-built function called "iPod out" that mirrors the screen and allows touchscreen inputs.
This is what I've been waiting for as I'm trying to minimize the number of electronic devices I have and have to learn to keep the cost of my projects down (baby needs food, apparently). Hopefully the next iPod touch will have GPS so I can have a nav function. The iPhone is out for me as I'm tied to Sprint for the meanwhile. So I'd have to carry a cell and an iPod.
Unless...does anyone know if Android has a similar feature?