**WARNING: Those with an iPod touch 2G whose serial number begins with MC will only be able to jailbreak on 3.1.2 and will need to use RedSn0w to help boot the device every time its turned off.
Create a folder on your desktop called Pwnage
Download RedSn0w from here and place it in the Pwnage folder. Likewise, download the latest 3.1.2 and 3.1.3 firmware and place it in the same folder.
NOTE*: The iPod touch 3.x firmware must be purchased from iTunes. iTunes will save the firmware files here:
~/Library/iTunes/iPod Software Updates/iPod2,1_3.1.2_7D11_Restore.ipsw
~/Library/iTunes/iPod Software Updates/iPod2,1_3.1.3_7E18_Restore.ipsw
Extract the redsn0w application from the RedSn0w zip file to the Pwnage folder.
Connect your iPod Touch to the computer and launch iTunes.
Select your iPod Touch from the list of devices on the left. Now hold down Option and click the Restore button. Restore is preferred as it won't create any wasted space on your iPod Touch.
Navigate to the Pwnage folder on your desktop and select the 3.1.3 firmware ipsw if your serial number does not begin with MC. If your serial number does begin with MC then select the 3.1.2 firmware ipsw. Click the Open button to continue.
Once iTunes has finished updating your iPod Touch to the desired firmware you may launch redsnw0w.app from the Pwnage folder on your desktop.
Once RedSn0w opens click the Browse button
Select the 3.1.2 firmware ipsw we placed in the Pwnage folder on our desktop then click Open
You will be asked if your serial number begins with MC. Click to select Yes if it does.
Once the firmware has been verified click the Next button to continue.
Make sure Cydia is selected.
If your serial number begins with MC you will only see a Cydia and a Boot Tethered Option. Otherwise you have the ability to add a custom boot logo or restore logo. Click to select the option which will open a file dialog. Select the logo you would like to use and click the Open button.
Click the Next button to continue.
Please plug your iPod Touch into the computer and make sure its OFF then click the Next button
Step Nine - For Serial Numbers That DO NOT Begin With MC
RedSn0w will now guide you through the steps to get into DFU mode. You can find more help with DFU mode here
Hold down both the Home button and the Power button for 10 seconds.
Release the Power button and continue holding the Home button until RedSn0w detects the device.
Step Nine - For Serial Numbers That DO Begin With MC
RedSn0w will now prompt you to put your device into recovery mode. Press both the Power and Home buttons continuously until the help message disappears.
Your iPod Touch will now reboot
RedSn0w will then begin uploading the new RAM Disk.
Once this is complete you will be notified that RedSn0w is done. Click the Finish button.
When your iPod Touch finishes rebooting (5 minutes or so), it will be jailbroken with Cydia on the SpringBoard.
***NOTE: To reboot a tethered iPod touch follow Steps Three through Six then select "Just boot tethered right now" in next step.