I have jailbroken my touch, and am very satisfied with the results. I should have done it a long time ago! The only thing left is to be able to send and receive SMS messages. I assume this is a dumb question and is not possible. However, just because I can't see how it could be done, doesn't mean it can't! So is there any way to accomplish it? Yeah, I know, I should have just bought an iPhone. AT&T stinks in my area, and I was fresh into a 2-year with Verizon.
There's no way this will work how you'd like. The only way to receive SMS is through a cellular connection. The iTouch does not have any way of interfacing with a cell connection, so you can't receive SMS through your iTouch. The reason you can send SMS is that website uses email. Your friends can't reply because it goes through a message server from their provider. If the iTouch ever gets bluetooth you could theoretically bluetooth it to a mobile phone and send SMS, but as of now you can't. Sorry.
lol, it does work, I use it on my laptop. When the person responds, it sends the message to your email. You can continue the conversation from that email.
Get AIM from the App Store. Then click the new IM button and put in the phone number you want to text to. That person will be able to hit the reply button and you'll get a text back as an AIM message. Or you can go on Meebo.com on Safari, sign into your AIM account and send your text as an IM to +1########## (Replace the #s with the phone number) and it'll do the same thing.