Limit the use of my Apple ID on my kid's iPod Touch I've had an iPod Touch (4G) for a couple years. Now I have an iPhone 5, so I want to remove all "my" apps/profile info from my iPod Touch and set it up for my children to use.

Right now, both devices use my apple ID, and share some (but not all) applications (mostly free ones). But that means, for instance, when I get an iOS message, it is going to both devices, which I don't want. Both devices sync to my laptop. I have music that I'd like to be able to keep on both devices.

What's the best set-up? Is my best scenario to create a new Apple ID for my kids' use, and reset my old iPod Touch and start over with the new ID? (is there any way to keep the set-up, like if I back-up and then restore? Or should I continue using the same ID for both devices? I'm worried about getting apps/profile info mixed up and accidentally downloading ones I don't want the kids to have to the iPod (e.g., I don't want them to be able to send messages to my contact list, which is mostly business!).
Since you do not want your children to have access to your Address Book (that syncs using iCloud), you should use a new Apple ID. This means you have to turn off and change the current iCloud settings in the iPod Touch. 

Since you want to keep the apps you already installed (using your iCloud), you shouldn't  restore the iPod Touch to its original (factory) state as that will delete those apps. 

I'll recommend backing up (whether via iCloud or to your Mac) using iTunes just in case you want to use the iPod Touch again in the future.