I own both Ipod touch and Ipad.
If this is for 10 year olds to use at home (not take to school) I'd suggest you get them the Ipad. I say this because its much harder for them to break the ipad (whereas an ipod is easily thrown across the room in a fit), its the exact same device for all purposes and most importantly, the ipad will let them work on a computer-like device... gives them practice in using tablet-type touchscreen systems which will no doubt be the standard computer when they're older.
Both play the same mp3's use the same itunes interface, both play videos, etc. Ipad basic is a bit pricier than an ipod but its much more capable and its battery lasts a lot longer.
"Will i need to buy an internet service package for them?"
Not mandatory. The ipod/ipad will use any wi-fi you may have set at home by default. If the device has 3G or 4G enabled then yes, you'll need to sign up for a data plan which if im not mistaken runs at $30 a month with a 2gb limit (which imo is really stupid). You can also as an alternative get a wifi-3g card from Virgin Mobile.. its a credit card sized 3g device that emits the internet in wi-fi from itself. Very nifty to have and its super cheap and has unlimited data.
"I know they will work off the wifi in my house, but when they are say out of the house, down at the park etc, would they need to have an internet service to get internet?"
Just like a wifi laptop man. If you dont have wifi access don the road or park you need to pay for it.
"Also, Id like to have some type of parental control over where they can "visit" on the web. (theyre 10yr old boy and girl twins)"
That's a good question... I looked it up and the ipad/ipod dont have native parental controls... not like in a computer where you have a program that can automatically block tens of thousands of websites. The only thing close to it is a manual 'block website' option which I doubt will be of any use as a parental control method.
There are apps you can download for that.. though its sort of self-defeating since you need to run the app manually for it to work.
In any case, 10yr+ olds in this day and age have already seen more porn that you did before you were 18.
You could also look into an alternative for both the ipod/ipad... I believe samsung released their Galaxy tablet thats a 7 inch screen, multitouch that runs windows 7... that will definetely run everything the ipod/ipad will and more plus give you parental control.
