A 160 MB later, I now have a French Canadian keyboard. This means I have a North American Qwerty keyboard (the French use the Azerty key format) with "entré" instead of "return". (Hat tip to De l'update 1.1.4… (in French)). I also have "espace" instead of "space".
The French Canadian keyboard is otherwise identical to the American and British Qwerty keyboards. With all three keyboards on the iPhone or iPod touch, to make an accent, you hold the key down and then scroll over. With a computer keyboard, the French-Canadian version (which you can add in Windows) is vitall as otherwise making an accent requires pressing a series of keys (such as alt130 for the accent aigu "é").
So the "space" and "return" on the keyboards used by French-Canadians was a bug. Pat on the back for Apple for fixing this bug less than 5 months after the release of the iPod touch in Canada (how many years did it take to resolve on the Apple II?).
Was it a 160 MB bug? No. What else was included with the update? Nobody knows. No other "features" as far as I can tell. My last 160MB update (1.1.3) was a letdown as well. Almost nothing changed with that one untill I unlocked the features with the $20 upgrade fee. I suspect iPod touch users will be expected to fork over more money this week when Apple announces the new "exciting business applications" next week.