If you purchased a 16GB iPod touch, your best bet is a soft jailbreak, as ZiPhone has been having major issues handling the idea that the iPod touch 16GB and 32GB use two physical SSD's and the program runs into issues which have not been successfully debugged yet. Zibri ordered his iPod touch 32GB and should start testing soon.
Anyway, as for your 16GB, you want to soft jailbreak to 1.1.3 and here's how:
First, you will need the firmware:
1.1.1,
1.1.2.
Download
ZiPhone, and run the app. Under advanced settings, you want to press "DFU Mode" to kick your iPod into Device Firmware Upgrade mode, and when the process is done, your iPod will reboot and show the "Connect to iTunes" graphic. When iTunes opens up (or if it doesn't, open it up manually) and close any dialogs that pop up. You should see the button for Restore, press and hold the SHIFT key and then click "Restore". Browse to where you saved your downloaded firmware's, and select "iPod1,1_1.1.1_3A110a_Restore.ipsw". Let it finish.
Now, on your iPod touch, open up MobileSafari, and browse to
http://jailbreakme.com and tap "Install AppSnap". You browser will now crash and you will return to your home screen (SpringBoard) and the jailbreak will commence. You will notice that it will say something about installing Oktoprep, but it doesn't work. When your iPod returns to the lock screen, slide to unlock, and open Installer (a new icon on your SpringBoard).
In Installer, tap "Donate Later", and go to the Install Tab and install Community Sources (look in "All Packages" it's in alphebetical order), and let it refresh your sources.
Now, go back into "All Packages" and look for "OktoPrep" and install it.
Now, open up iTunes and open your iPod tab on the left, and look where you see "Update" and "Restore" you want to SHIFT+click "Update" and browse to your firmwares and select "iPod1,1_1.1.2_3B48b_Restore.ipsw". Let it finish.
Download the
1.1.2 Jailbreak, close iTunes, and restart the computer (this method works best on Windows, I've had major issues trying to get it to work properly on a Mac due to an error with iPhuc), then kill any processes associated with iTunes such as "AppleMobileDeviceService.exe" and "iTunesHelper" and "iPodService", etc. Run the 1.1.2 Jailbreak and check "Install SSH" and press "Jailbreak!". Your iPod will now be reflashed, and you must restart the device when it completes. It will auto-reboot once, this is normal.
Now, you are in 1.1.2 Jailbroken, you want to open up Installer again, and install the following packages: BSD Subsystem 2.0, and possibly Community Sources once again. After that, open up the "Sources" tab and tap "edit" then "add", and add the following and press OK:
http://ipodtouchmaster.com/files/repo.xmlNow, once it's done refreshing the sources, you want to scroll untill you see the "Mobile Jailbreak" folder, and inside tap "1.1.3 Jailbreak+iPhone Apps!". Go through the prompts. Now, it will look like Installer has stalled out, but it really hasn't. It's doing it's job, and it may take a while. It has to downlload the 1.1.3 firmware image, and decrypt and jailbreak it, and then write it to the device. When it finishes, it will automatically reboot, and you will be rewarded with a Jailbroken 1.1.3 and iPhone apps plus the wiggle feature for SpringBoard for free.
Congrats! You're done with the jailbreak. Now, open up Installer, and search for BossTools, and install it. Run the new app, and relocate all the fonts, ringtones (yes, they exist on the iPod touch as well!) and apps so that you can install more apps (If you dont do this, when you hit th app limit, Installer will error or crash).
Now you're really done.