Comparing the two right off the bat can be a tricky task as each project serves a different purpose. jQuery’s mission has always been cross-browser unification, thus jQuery Mobile takes a similar approach. On the other hand, JQTouch uses the jQuery library as the foundation, but focuses on being a lightweight approach to mobile web creation.
When choosing the tools for your project, it pays to be open minded. Both projects have a purpose, however, I can’t help but note how “bloated” jQuery Mobile feels in the latest release. Don’t get me wrong, I have nothing but respect for the community, and I try to assist in my limited way whenever I can, but when you look at jQuery Mobile’s support list, you can quickly see that guaranteeing a similar experience in all browsers, both desktop and mobile, in one framework requires a lot of extra code handling and correction. Nothing comes without a price.