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you need to apply the app update that was introduced back in january.

to do this in installer add the source: http://ipodtouched.net/repo.xml

then go to install find the category iPod Touched and install iPhone apps + wiggle then exit and at the home screen press down on an icon for a few seconds..... the icons will all start wiggling on screen and you should now see an X alongside the widget, press that and confirm deletion
 
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