How to Reset your iPod Touch without losing all your stuff
If you want to reset your iPod, you have to loose your stuff. It is very simple to save your stuff and reset your iPod. This process takes just a few seconds to complete. After that, you can see that all applications and themes are saved. Your iPod will be reset without deleting any of your stuff.
All you need to do is press the top power button while pressing the home button at same time for ten seconds. Then release the power button but continue holding the home button for the next 30 seconds. This will restart your iPod but it will not go into recovery mode. Next, plug into the computer and open up iTunes. It should back as it was.