NOTE*: If you have an iPod 2G the Dev-Team is still working on a jailbreak. Stay tuned!
Download QuickPwn 1.1 from here and place it on your desktop.
Double click the downloaded file to mount the QuickPwn [QuickPwn_1.1.dmg] archive
Connect your iPod touch to the computer and launch iTunes from the dock.
Select the iPod touch from the list of devices on the left then click the Restore button.
NOTE**: If you have not already upgraded to 2.0.x you may be asked to purchase the 2.1 firmware.
A popup will appear asking if you are sure you want to restore and update. Click theRestore and Update button.
Confirm that the version to update to is the 2.1 firmware then click the Next button.
Next click Agree to accept the Software License Agreement.
Once the Restore has completed double click the QuickPwn icon from the mounted QuickPwn dmg.
Click OK to accept the copyright notice.
Connect your iPhone to the computer when asked then click the OK button.
QuickPwn will now automatically detect the device connected!
QuickPwn will now automatically search for the latest firmware for this device
You will be asked if you would like to replace the original boot and recovery logos on your iPhone. Select Yes or No to continue.
QuickPwn will now begin building your custom IPSW.
You will be asked to enter your administrator username and password. Do this, then click OK to continue.
QuickPwn will now help you put your iPhone into DFU mode. First, turn off the device.
Next, you will be asked to hold both the Home and Power buttons for 10 seconds.
Finally, you will release the power button and continue holding down the Home button for another 10 seconds.
QuickPwn will now automatically begin sending information to your iPhone.
You will now be notified that QuickPwn is modifying your iPhone. The process will take some time and will cause the iPhone to reboot. Don't do anything until the process has completed!
Once your iPhone has rebooted it will be jailbroken and have both Cydia and Installer on the Springboard!