Nice. This is an adaptation of VNsea called “Touchpad.app” that allows you to use your iPhone as a computer touchpad by leveraging VNC remote networking technology. I’d guess it’d work with an iPod Touch as well but mine’s not jailbroken and nobody on the source site seems to have tried it, so your mileage may vary.
As a side note, there’s some bickering going on about who made what and who ripped off whom. We’ll stay out of it for now, but be aware that someone’s miffed.