Yes, there are a couple of ways to do that (probably more than a couple, actually, but here are two.)
When you connect your Touch to your computer and click on it under the 'Devices' tab in iTunes, under the 'Summary' tab there will be a checkbox in the 'Options' menu at the bottom of the window called 'Convert higher bit rate songs to...' that will let you choose bit rates of 128, 192 or 256 kbps. Then, when you sync songs to the touch they will be converted to the mp3 bit rate you've selected as they're downloaded without affecting the orginal lossless files. Transferring them to the Touch will take awhile because they're being converted before download.
You can also go into your iTunes library, duplicate the Apple Lossless files and convert them using an application like Max, create an mp3 playlist for those songs and sync it to your Touch but the method above is definitely the easiest.