My twins got iPod Touches early this summer - a couple of months before they turned 9.
For all the reasons you stated, it's a great device. As well as all the great apps and games, your god-daughter can also read ebooks on it. I have the girls' iTouches locked down so they can't get to the Apple store or browse the web, but as you said, that won't be an issue in your case.
I think she'd love it.