It's full internet, except flash. So you can't access pages made entirely from flash, although you can browse pages with bits of flash on though they won't be active.
The radio is just wifi so yes it would disconnect when out of range.
Quote:
“Is there any other way to stream or use the internet other than wifi?”
Well, there is the iPhone which connects to net via phone signal...
iPod touch & 2nd Gen differences = slightly different look, the 2G has speakers, external volume control, microphone input support, a 100mhz faster processor...so far this doesn't affect much as the 1st gen has the same capabilities.