I am not sure what you want to achieve, but I think you might have more luck asking your questions about the Touch in the Squeezebox forums (
http://forums.slimdevices.com/index.php).
I will, however, try to give some kind of answer to your first question (Is MC14 compatible with the Squeezebox Touch?).
If you want to use MC14 to play music on the Squeezebox through its DAC, I think the answer is no.
MC14 cannot push music files to the Squeezebox, or rather the Squeezebox Server software controlling the Squeezeboxes. That would be a nice feature, but it is currently not available in MC14. For this there are a couple of nice freeware software (muso and Moose), but if you plan to use the Touch without having the Squeezebox Server software running on a computer I am not sure that is possible.
MC14 can certainly play music on your computer's soundcard. The problem would be to get the sound through the DAC in the Touch. At least the current Squeezboxes do not have any audio input. There are workarounds, and you can ask about that in the Squeezebox forums, but as far as I understand it the conversion is then done by your soundcard, not the Squeezebox DAC.
If you want to use MC14 to manage and tag your music files (which are then played using the Touch itself or the Squeezebox Server software), I would definitely say yes because MC14 is very versatile. That is the way I use MC14. I have only a couple of issues with that approach:
1. The Squeezebox Server software can read the MP3 (ID3v2.3) tag TORY for the original recording date of a song (and the equivalent for ID3v2.3), but there is currently no way for MC14 to read or write that tag to the files. This will have to be done using other software (such as the freeware MP3Tag), which is a hassle.
2. If you have already applied replay gain tags to most of your files, you should not use the replay gain feature in MC14 to apply replay gain tags to only some music files (i.e. new music) since this will give you a lower volume level than those other files when played on the Squeezebox (and I think MC14 does not write album gain tags only track gain). I still use other software than MC14 to apply replay gain tags.