I am planning to build a device that will help transfer data from one USB storage device to another.I am planning to incorporate a touch screen interface to provide the user with more control over data transfer.
Will this device need an OS?
No device needs an OS per se. An OS simply provides an abstraction of the various operations the device is capable of; if these abstractions aren't required (e.g. the device will never change and will only ever run one piece of code until it dies) then an OS isn't necessary.
What kind of parts are needed to implement an OS on such a device? (I understand this sub-question may be too broad for this forum, so I'll be glad if you can even me point to relevant literature on and off the internet.)
Definitely too broad. Take a look at Andrew S. Tanenbaum's Operating Systems: Design and Implementation, where he goes through the implementation of MINIX, an operating system for x86 machines.
Most anything can be done without an OS; but it may take more (engineering) work to do so than makes sense ("sense" being a very relative calculus of merit).
If this is a hobby project (low labor cost, need to keep parts costs down) you might roll your own or do without. If it's a prototype implantable device you hope to sell to medical device manufacturer, you may make a different choice.
You'll have a much better handle on that when you have a list of requirements and a system design in front of you, and some costs of parts, your labor with and without using an OS, your labor or $$ to make or buy the OS, and whether there are benefits to using an OS other than cost and time, such having more confidence that your device will be at least as reliable, correct, salable (to another producer), ..., than if it didn't have one.
