There is probably something wrong with your iPod. I'd take it to the Apple Store. iOS 5 works fine on a 3GS, and your iPod has iPhone 4-comparable hardware.
The iPod touch (current gen) has 256MB of RAM to the iPhone4(S)'s 512MB. The iPod Touch (current gen) has a retina display which the iPhone 3GS doesn't have. These factors may have produced a difference in performance.