1. Plug in your iPod
2. Go to
http://spiritjb.com/
3. Download Spirit for whichever operating system you're on.
4. Run spirit, press the button.
5. Enjoy your jailbroken iPod once it's rebooted itself.
Simples.
All-in-all should take about a minute to do.
After you've jailbroken you should have a new icon on your homescreen called 'Cydia'
Cydia is just like the appstore, only it's for jailbroken apps and hacks.
A few things I reccomend you download from Cydia:
1. SBSettings (Gives you a nice drop-down menu from anywhere on your iPod where you can toggle things like WiFi, brightness, bluetooth, etc. Just swipe your finger across the status bar to use it)
2. Winterboard (Lets you change your homescreen wallpaper (from the black) and also apply themes. For themes I reccomend 'Glasklart' and 'Smoog', but feel free to try others)
ENJOY