How to Update your iPod Touch to the 3.0 firmware
1.First download correct firmware for the iPhone or iPod Touch. And change the dot extension of the file before that open the explorer and select Tools menu then go to Folder options, open view tab and deselect "Hide extension for known file types" option and click ok.2.Now right click on the file and click rename and change the extension as ".ipsw". Now open the iTunes and make sure the iPhone is connected with the data cable to the system. Now press down the home and power button of the iPhone until it reboot and after apple logo shown release the power button and keep hold on the home button.3.After the USB cable and iTunes logo shown on the screen release the home button. Now iTunes will recognize the device and now press down the shift key and click on Restore button, the browse window will pop up now select the "ipsw" file and click open.4.After the restoration is completed "the iPhone has been restored" message will appear and then click ok.