Note: Before you are able to jailbreak your iPod, you have to downgrade to the 1.1.1 firmware because the new iPods are being shipped with the 1.1.2 firmware already preloaded.
Here is a FAQ for Jailbreaking:
1. What is Jailbreaking the iPod Touch?
A: Jailbreaking the iPod Touch means that you break the protection apple has installed on the iPod and allow for 3rd party programs to be installed on it. (It is similar to unlocking a cell phone)
2. Why do I need 1.11 installed to Jailbreak?
A: The iPod Touch was released with 1.11 and iPod Touch hackers were able to find a vulnerability and use it to jailbreak the iPod Touch. The newest software version 1.12 has not been hacked but the work around is downgrading to 1.11 and then using the old jailbreak method.
3. How Can I Jailbreak my iPod Touch?
A: Once you have 1.11 installed check out our iPod Touch Jailbreak page. There are multiple methods to jailbreak but the current one posted on 12/01 described in this post is currently the easiest solution.
4. Can I installed iPhone Apps on my iPod Touch?
A: Yes, After you have jailbroken your iPod check the iPhone Apps post.
5. Where can I find applications and games for my iPod Touch?
A: You can find iPod Touch Games and applications with a google search or check out ipodtouchgames.com.
6. Will iPhone Applications work on my iPod Touch?
A: Yes.
(extracted from http://www.ipodtouchhacks.com/)

January 5, 2008 at 8:51 pm
How can I down grade to 1.1.1?
January 14, 2008 at 12:43 pm
follow the link…. read dumb ass
January 28, 2008 at 12:24 am
What effect will downgrading my ipod to 1.1.1 have on the software upgrade from iTunes
September 24, 2008 at 12:55 am
What effect will downgrading my ipod of 2.1 have on the software upgrade from iTunes
October 4, 2008 at 5:53 pm
it will explode!!!!!!!
October 12, 2008 at 8:39 pm
yes it will explode i tried it n im trying to sue apple
December 8, 2008 at 2:50 pm
how do i know what version of ipod touch i have…(1.1 or what??)
January 27, 2009 at 3:18 pm
Do realize that jailbreaking your iPod voids your warranty, especially if something goes wrong and you cannot restore the iPod to factory specs.
January 29, 2009 at 9:18 am
it dosent show up when appsnap it installing. how could i do so that it could show up on the screen the installing bar for appsnap
March 2, 2009 at 10:07 am
i have the iphone i dont need this
March 27, 2009 at 2:38 am
all you instant gratification junkies need to get a fucken life and oh jeeze, socialize once in a while, instead of fucking your i phone or i touch. seriously get a fucken life instead of downloading apps to fill the void of that which is your pathetic existance. fucken losers.
April 12, 2009 at 1:07 pm
Okay guys come on this is the stupidest thing u can do it voids your warinty so u can’t get a repair it u don’t need it and it has a small chance of yes actually breaking (exploding) you are all losers if u do this it’s the worst thing u can do. — maggie
April 22, 2009 at 6:17 pm
Don’t be hatin’, just because they east thief time with jailbreaking ur iPod touch didn’t mean that there “fucken losers”. Come on. I to believe that it is a bit of a waste if time tho.
Suck a dick, bitches! =)
April 22, 2009 at 6:19 pm
Wow… That guy can not spell what so ever….
May 18, 2009 at 7:01 pm
u kno who cant spell ur mom so suk it bitch
May 27, 2009 at 6:30 am
dont know where the application folder is on my ipod
June 29, 2009 at 7:37 pm
Ive heard thT IF YOUR IPOD IS GONE BAD U CAN RESTORE IT AND ITLL BE FINE BUT I DONT KNOW IF ITS TRUE AND IF JAILBREAKING IS A GOOD IDEA
July 7, 2009 at 9:19 am
fuck you mike thats bull shit
July 22, 2009 at 3:28 pm
man only fuckin fags are named eric you fuckin dooshe bag
July 24, 2009 at 3:48 am
hell with jailbreaking because it does not work
July 24, 2009 at 3:48 am
jail breaking is a joke
September 27, 2009 at 10:36 am
i bought my ipod touch almost a month ago.
& i do not have the installer app.
which every video i watch for installing things has it,
i cannot install what i want because i do not have the instaler app. i would like to know how you get to change themes and lock sounds on my ipod touch but it seems the only way is to use installer. how do i get installer app on my ipod? please email me back because it is making me mad. ive been up all night trying to find out how.
September 29, 2009 at 3:45 am
Anda mank benar
December 15, 2009 at 12:29 pm
My name is teela oliveira, and I’m a fuckin loser and a poser!
Just the same though, I an ipod slut.