Several users report that Apple started allowing iPod touch owners to upgrade to iPhone OS 3 for no charge.
The information initially comes from PocketGamer’s Tracy Erickson:
Just as when asked to download and install the latest firmware on an iPhone, iTunes simply asks for confirmation – no signing in to pay for the software.
Sounds like free a good price for iPod touch 3.1.3 upgrade.
PS: Jailbreakers: think before updating – you might lose the ability to jailbreak your device if you upgrade the firmware.
Update: Several users confirmed the free update. However a number of users report that they are still asked to pay for the update.