I can select a game in iTunes and it is downloaded to my Apps Library. I can see it on my hard drive. I cannot download the game from here to my iPod.  How do you do this?

I am trying to download games to my iPod Touch.  I can select a game in iTunes and it is downloaded to my Apps Library and on my hard drive. But I cannot transfer or copy this file to my iPod so I can play the game.  What do i need to do?

Sync it, like you do anything else.
Have a look at the manual:
iPod touch User Guide (For iOS 4.3 Software)

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