I own an iPod touch 8gb 2g and I'm sort of running low on space, lol! I want to purcase a 16gb(or larger)because I need the space but I don't really have the money to be putting out like that. Is it possible to trade or pay a minimum fee to do so.
No you simply cannot do that. If it is within the return period, you can return it, pay restocking fee ( I believe 30% ) and then purchase another one.
Try selling it and waiting for the new 3rd Gen iPod Touch