Hi i jb my 5.1 ipod 4 but i dont want it anymore. I tried doing a old backup but it still jb. Everytime i wanna restore it says i have to update. DO I HAVE TO UPDATE???
If all you are wanting to do is un-jailbreak, then yes just update, this will remove the jailbreak All you apps will still there (any apps you have that are from Cydia, or any apps that are non Apple approved apps will be removed when you update/un-jailbreak).
Sorry beastlyxd, I thought you meant in your first post that you didn't want the jailbreak anymore.
If you choose reset all settings and contents, it will basically put your iPod back to the same state it was when it was new, the jailbreak will be removed etc.
The software on the iPod will be whatever version is currently the newest. Using my iPhone for example. If I had iOS 5 on it, and I then choose reset all settings and contents, during the reset the software on it would be changed to iOS 5.1.1.