This tutorial is meant to help those having trouble breaking their 2nd generation iPod Touches. This guide is made for Windows, but the directions are similar on a Mac.
First, you must upgrade your device to software 3.0 though iTunes. Â Pay the $10 free to upgrade ( or find another way to get the firmware 
) and continue.  If you update through iTunes then the process is expained in iTunes.  If you obtain the Firmware from another source, save it in a location that you won’t forget.  Go to your iPod in iTunes, hold “shift” and click “restore”.  It will open a file browser window and you can upload your saved firmware. Let the iPod update.  Note that your files on your iPod will be replaced.  Your iTunes files will resync when the update is complete.
Next, download the latest version of Redsn0w from http://theiphoneproject.org/windows/redsn0w-win_0.7.2.zip and install it to your computer.  Run Redsn0w.  You will be prompted for the firmware file.  If you bought it through iTunes, it will be saved where iTunes keeps its restore files. If you need to, you can open iTunes and do the “shift-click” method again. Use the path given. If you obtain it from another source, it will be where you saved it.  Follow the directions in the Redsn0w program and it should be jailbroken.  Have fun!
If you are like me and had the tethered 2.2.1 jailbreak, restore it to your original firmware in iTunes first. Â Then proceed with the steps. Â Hopefully it saves you the headaches it saved me.
Troubleshooting: Â If something goes wrong, RESTART YOUR COMPUTER, then retry. Â That is the main cause of errors. Â Ask me questions here after you have already tried restarting.
"If you are like me and had the tethered 2.2.1 jailbreak, restore it to your original firmware in iTunes first. Then proceed with the steps. Hopefully it saves you the headaches it saved me."
Same problem, thought of the same solution as you and it's upgrading to 3.0 now… We shall see.
Does it work without internet connection and without itunes8.2
if this dosnt work then can you send me the jailbreaken firmware please @donovanmeeker@telus.net
iPod Touch 3 0 firmware update
This updates your iPod Touch to the latest 3.0 firmware.
This is the orriginal update from apple, so no jailbraik yet.
How to use:
Check if you have a first generation or second generation iPod
(see http://en.wikipedia.org/wiki/IPod_Touch for details)
Connect your Ipod, Open iTunes, hold SHIFT and press ‘Check for
Update’ or ‘Restore’ (depends on if you want to update or a
clean install). Select the appropriate firmware file. Update
takes about 15 minutes.
What if I fuck up?
If you manage to brick your iPod, for example by turning of your
machine during the update, you can always do a clean recovery by
folowing these steps:
1.Make sure iPod is completely powered off.
2.Hold the home button while its off.
3.While holding the Home button, connect the cable. The iPod should power on.
4.Keep holding the Home button.
5.The Connect to iTunes image should come up.
6. Congrats, you in recovery mode.
In I-tunes:
1.Click SHIFT+recover
2.Select the appropriate firmware file.
note: On a MAC, use option-click instead of shift-click
rapidshare.com/files/288050317/iPod.3.0.nfo
rapidshare.com/files/288051939/iPod1_1_3.0_7A341_Restore.ipsw.001
rapidshare.com/files/288050183/iPod1_1_3.0_7A341_Restore.ipsw.002
rapidshare.com/files/288050058/iPod1_1_3.0_7A341_Restore.ipsw.003
rapidshare.com/files/288051996/iPod2_1_3.0_7A341_Restore.ipsw.001
rapidshare.com/files/288052085/iPod2_1_3.0_7A341_Restore.ipsw.002
rapidshare.com/files/288051338/iPod2_1_3.0_7A341_Restore.ipsw.003
use
rapidshare.com/files/98147405/hj.split.and.join.rar
how long it takes to reboot?
It shouldn’t take too long. How long is it taking for you?