Easy. First you need a copy of the 1.1.1 firmware. There's plently of links on this forum so just search under firmware and you should find it. Download that and put save it to your hard disk When it downloads/unzips make sure that it has the extension IPSW. I searched for mine on Google.
Next step Power button and home button pressed together to put your touch in restore mood. (again there's plenty of links in the forum here)
Then connect your touch back to you mac (PC) and start itunes. It will prompt you to restore, if not no biggy. On the mac just hold down the option button and then select restore from itunes (for PC I think its CTRL) this will allow you to select the file that you juts downloaded as the firmware version to restore.
I had to do this a couple of times myself before I got 1.1.2 working.
Cheers!
