Try moving further from the router if you are too close, or closer if you are too far.
Reset the router, since on-and-off Wi-Fi is a sign that the router is not functioning properly. There should be a small reset button on the router somewhere.
You may be receiving the signal through too many walls or other obstructions that prevent the Wi-Fi signal from getting to and from your iPod Touch.
Turn your iPod Touch off and then on again. Sometimes the iPod Touch is the problem.