I'm a little hesitant of jailbreaking my ipod touch (v2.1), maybe you can answer a few questions for me......?

Will I still be able to use App store with a jailbroken touch? Are there any "bad side effects" that occur? (will it affect any Apps I already downloaded?) To "un-jailbreak" the ipod is it just a case of zapping it with iTunes? And finally....are there any "must have" apps that I can only get with jailbreak? (is it really worth it???)