Well there are a couple of reasons the iTouch runs in a lower resolution. The biggest reason is the design of the iTouch is flawed. It doesn't have the texture memory of the iPhone. Why this is the case I have no idea. It seems crazy that the device doesn't support the same texture memory. Why give a device high res, and then cut the resolution in half.

We use quite a bit of texture memory for the graphics and have been working on some solutions that will probably come with the iPad version since we are required to scale back on texture memory there as well for the iPad 1.

As for the UI comment, could you explain specifically what you find clunky about the UI? We are always open to suggestions, and if you have some that would make the UI more user friendly we would love to hear them.