I jailbroke my iPod in about 20 min using this method.
OOB, it was 1.1.2 - Don't want this.
Downloaded 1.1.1 restore file.
Restored to 1.1.1 - jailbroke it.
From here, visited the installer app on the touch. Found Oktoprep. This isn't much of anything, but allows us to go to 1.1.2 w/o any problems.
Update to 1.1.2 on iTunes.
Downloaded the 1.1.2 folder/software. This contains jailbreak.jar file if you're on a mac, windows.bat file if you're on a PC. Upon opening, you get a window that says restore or jailbreak. Assuming you've already updated 1.1.2 on iTunes, click jailbreak. That's it.