My iTouch got stolen. Would they be able to recover or see my files?

My iTouch got stolen. I know it would be nearly impossible for me to find it. But my concern is that, would they be able to view my files? My iTouch is password protected though. Is there a possibility they would see what's in it? Thanks for the help.

I don't use iMessage but it doesn't sound good.  It might be that the thief knows you AND your password is something that is easily guessed, like your house number or the last four digits of your phone number.
Don't agonize over what might have happened but, instead, take some steps to ensure that nothing else happens:
Change your iTunes (Apple ID) password along with any other password that was stored in the iPod.  If any passwords are associated with credit cards, contact the CC company and get your card replaced (with a new number).  If any passwords are associated with your bank or any savings institution, contact them also and discuss approprate action with them.
Then, at your leisure, check to determine if anything financially bad has happened, such as credit card charges, bank account withdrawals, etc.  If anything like that has taken place, contact the financial institution and discuss the situation with their personnel.  I've had some credit card scares and my CC company took good care of me.

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