Download your iPod's firmware file in IPSW format. The latest firmware is 4.3.2. If you have an iPod Touch 3rd generation download it here: http://appldnld.apple.com/iPhone4/041-0667.20110414.95hVL/iPod3,1_4.3.2_8H7_Restore.ipsw. If you have a 4th generation, download it here: http://appldnld.apple.com/iPhone4/041-0666.20110414.3QvM1/iPod4,1_4.3.2_8H7_Restore.ipsw. If you have an iPhone 4, download it here: http://appldnld.apple.com/iPhone4/041-0662.20110414.byQ84/iPhone3,1_4.3.2_8H7_Restore.ipsw
Download redsn0w here: http://www.quickpwn.com/redsn0w. Save both this, and the IPSW file to a folder on your desktop.
Run redsn0w and follow the on screen instructions. Enjoy your newly jailbroken iPod Touch!
The iPod touch is a beautiful device, but unfortunately Apple restricted a lot of it's potential by locking the firmware. The only way to unlock the full potential of your iPod and install custom applications, ringtones, etc, is to "jailbreak" the iPod, whereby you remove Apple's firmware restrictions. Previously this required opening up the actual iPod and voiding the warranty, but luckily with recent advances you can safely jailbreak your iPod with little to no computer experience, and your warranty will stay completely in tact! This is 100% safe, and there is no risk of damaging your iPod if you do it properly.
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