Remote not working?

Your ipod should be where the remote app is installed. Your iTunes on your PC is what it can control. Both have to be on the same network, with the Touch obviously access in via wifi. iTunes need to be open on the PC. Run the Remote App on the touch, and in it's settings have it add a library. In iTunes, your Touch should appear with the remote icon in the left pane under devices. Click on that, then enter the same pass code as is showing on your touch.

If your Touch does not appear, or the Touch doesn't offer a 4 digit pass code, you need to check your sharing/firewall/and or router settings. One or more of those is keeping the Remote signals from getting through.