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I just upgraded my Touch to 1.2.1 and have not had any trouble with it. As members may know, I have an ill-behaving Touch which drains its battery in less than 4 days unless I reboot it after I charge it (there are several lengthy threads on this topic). So I can report that the upgrade to 1.2.1 does not alleviate that problem, but it doesn't hurt it either. I can still kill the battery drain by a simple reboot.
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