Connect your iPod Touch to your computer with the USB 2.0 docking cable.
Click your iPod's name under "Devices" on the left-hand side of the iTunes browser. Click the "Summary" tab.
Click "Restore." Follow the prompts in the dialog box that appears to finish the restore. Your iPod will return to factory settings.
If you enter the wrong passcode repeatedly on an iPod Touch, it will display a message that says "iPod is disabled." At first, the iPod will only be disabled for a minute, but if you continue to enter the wrong passcode, it will become disabled for longer periods of time, and finally, you will need to connect it to the computer with which you last synced it. From here, you will need to restore the iPod Touch to factory settings.
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