Can I use apps already purchased and in iTunes if I purchase a new iPod.  2nd gen I have died today

My 2nd Gen iPod Touch is stuck in the restore mode.  Screen shows USB plug and iTunes logo.  I have tried multiple times to restore it through iTunes and the restore process keeps erroring out.  After checking the repair pricing, it's probably wiser for me to buy a new iOS5 model.  Is there anyway I can use the apps I have already downloaded and paid for on a new unit?  My suspisions are no, but thought there might be a way to do this.

Thanks guys for the help.  Just placed my order for a white 32GB unit.  Since the original was a Christmas present from my wife, and she had engraved a nice message on the back, I decided to duplicate the message on the new one. 

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