ok guys, it's really simple.
1.
Download this 1.1.1 file. Make sure that when you download it, it stays as either a .zip or .ipsw, if not, download it with a different browser. If it's a .zip, just rename it to .ipsw. Put this somewhere you can remember (like your desktop).
2. Connect your iPod and put it in restore mode (hold home+sleep, let go of sleep after 10 seconds, keep home held down), open iTunes if it doesn't by itself, and select your iPod in the left pane.
3. Option+click restore (shift+click on windows).
4. Select the .ipsw file and hit ok.
5. Once it's finished restoring, go to
http://jailbreakme.com on your ipod and click "install appsnapp" at the bottom.
6. Once that's finished, open installer, and click on All Packages, then select OkToPrep. Install this.
7. Now connect your iPod, open iTunes, and select it in the left pane.
8. Click on Upgrade (NOT RESTORE).
9. Let it Upgrade.
10.
Download this Jailbreak package and extract it your desktop.
11. Make sure your iPod is still connected, and open the folder you just downloaded. If you're on windows, double click Windows.bat, if you're on mac, double click Jailbreak.jar.
12. Follow the on-screen instructions to jailbreak it.
13. You're done.