Yes! the internet on the iPod touch is free no matter what generation :)
A second generation iPod touch costs $200 if you buy it new
The second generation iPod Touch does not have a built-in microphone, but you can connect the new iPod earphones with the controls, which does have a microphone and will work with the second generation iPod Touch.
ipod touch 2nd generation
The second generation iPod Touch does not have the capabilities to handle multitasking. You cannot get multitasking on the second generation iPod Touch.
No, the second generation iPod Touch does not come with FM radio. You must be connected to the internet using a radio app to listen to FM radio.
yes
yes
This only works on iPod touch third generation, iPad,or iPhone and you have to have iOS 4. If you are using the second generation, you will have to jailbreak you iPod touch.
the ipod touch 1st generation and the second generation
No, the iPod Touch first generation does not have a built in speaker. You can only listen through headphones.
No. Although it is possible that it would fit, the camera that is on the 4th generation ipod touch would be covered up with a second generation case.