The iPod touch Mod folks are moving forward with their dream of making the iPod touch a cheaper version of the iPhone.

Using their in-house microphone concept, they have successfully installed Nikotalkie, a free audio messaging platform created for the iPhone.

Yesterday, the group successfully placed a VoIP phone call with the iPod touch utilizing the same in-house microphone and software originally created for the Nintendo DS.

No word on when the software hack will be available for the general public.

A rough schematic of the mic can be seen here. Check it out and commence bulding.