The easiest and best way to Jailbreak your ipod Touch will be to download ZiPhone available for both PC and MAC from the following link.

Download http://download.ziphone.org/

Once downloaded and installed make sure iTunes is turned off then fire up the application. Once loaded simply click Jailbreak button under the iPod Touch section. Your ipod will restart go into terminal and then should start with a new icon which you will then connect to your wireless and refresh all sources to view a list of applications to install. Lots of fun stuff to play with once you have your ipod Jailbroken.

Note: I recommend doing a clean firmware restore before as the first time I ran ZiPhone my ipod ran through most of the Jailbreak process and eventually failed due to a directory not existing. This may be due to the auto firmware updates in the past that cleared some folders.



Have fun.