One of the big issues for developers who want to use in-app micro-transactions for their games - as supported in the OS 3.0 update - is that while iPhone users got the update for free in June, iPod touch users have had to pay $10 for the privilege.

Of course, a lot of them didn't and considering Apple has sold 20 million iPod touches, that's potentially a lot of lost revenue.

Now however Apple has half backed down.

Announcing OS 3.1 at its It's Only Rock and Roll press conference, the price has been dropped to $4.95 or £2.99 for an upgrade from OS 2.x.

If you're an iPod touch user already on OS 3.0, then OS 3.1 will be free.

As for extra goodies in OS 3.1, the Genius music recommendation system has been extended to applications and games and there's support for peer-to-peer gaming over Bluetooth or Wi-Fi.