Haven't synced in over a year?! I'm uneasy because I haven't synced my iPhone for a few days. =( The progress bar stops halfway through the process. I"ll have to leave it syncing overnight to see if it ever goes through...
But I can see your perspective. It kinda stinks that they make you pay for upgrades on the iTouch. It's like your a second class citizen. 
I agree it sucks to have to pay for the upgrade but us ipod touch owners are the bastard step children to the iphone owners.
But to the point of not upgrading, I'm really happy with 3.0, the cut/copy/paste is a huge upgrade, and spotlight search. I just can't live without my iTouch.
I have encountered the backup issue, and I turned offf teh push notifications because it seemed it was sucking may battery down. That and there isn't a compelling reason to use the push feature as of yet.
I have no jailbroken my iphone. I really like apple but.... we are happy because copy-paste? Apple is a strange company with strange strategy. I think is hard to be ipod touch user
i have copy paste support through an old plugin.
and i have non-draining push notifications :)
I've yet to use Copy/Paste. The spotlight-esque Search capability and the landscape-mode Mail, however, are gold. For what it's worth, I didn't upgrade my Touch to 3.0. I bought an iPhone that already had it installed. ;-)
In my house we have two 3G's and one 2G. I upgraded all three to 3.0 and like the results. One of my favorites is the edit of SMS where you can forward. I use this to resend the same msg if necessary. The other function I like is the Internet Tethering.
My iTouch is still jailbroken at 1.4. Why? Because it works. My battery life doesn't get drained by all these new features and apps I don't need. I don't need any of the 3.0 stuff.
For 1.4 I just got the MobileFinder, Download Support and iShare. And a bit of text and image support. It works great, and I don't have to worry about getting caught up in the "Apple Frenzy" of paying money for new devices and new software. 1.4 is relatively stable, and I don't have to worry about paying for apps when the apps that are currently on the store mainly existed as freeware before they were commercialized.
Also, might it be noted that i'm running one of the old chessmaster games through a gba emulator (don't worry, I own it for gameboy, or at least, before I lost it). It is a relatively strong-or at least for me-engine, that doesn't have many of the bugs of the apps.
Just my 2 cents, or maybe dollar. Makes my life easier. I haven't synced with my computer in over a year, though I probably ought to back it up :/