You have to downgrade to 1.1.1 before you can use jailbreakme.com. 1.1.2 patches the hole that all current jailbreak methods use.
After you've done this, you can upgrade to 1.1.2 and retain your jailbreak. But I'm not sure there's any reason to, 1.1.2 doesn't seem to add anything significant to iPods w/ jailbreak.