The iPod Touch 2G might seem outmatched and outdated in the presence of the iPhone, but they are dirt cheap and have many of the same functionalities once you jailbreak them. How do I jailbreak them, you ask? This video will show you how to do it quickly and easily using a program called Redsn0w, allowing you to do almost limitless things with your iPod Touch. Just follow these steps and you're good.
From the creator:
IMPORTANT: You should select (in the "Browse .ipsw file)the same file you used to configure your iPod.
If you want to use the firmware i provided: Before starting the process of Jailbreaking, you should go to iTunes, your iPod setting and hold shift and click restore. A folder will pop up, and select the .ipsw file i provided. Put that same file in the "Browse .ipsw file" of Quickpwn.
Ipod Touch 2G Firmwares:
.NET Framework 3.5 Service Pack 1 for Windows
(Download and install if Quickpwn won't run):
To try Redsn0w Beta, go to: http://redsn0w.com/