Most of you might have already know by now that an all-iOS device jailbreak called JailbreakMe 2.0 (Star) has been released.
This new tool utilizes userland jailbreak vulnerability which enables it to jailbreak any iOS device on the latest firmware right from the Safari browser.
The following instructions, along with a how-to video guide will help you jailbreak your iPod touch 3G and iPod touch 2G MC Model on iOS 4 with JailbreakMe 2.0 (aka Star).
Step 1: Start iTunes and backup everything from Contacts, Calendars, Photos, Videos and Apps.
Step 2: Update your iPod touch 3G and iPod touch 2G MC model on the latest iOS 4.0 firmware. Download links for the firmware and iTunes 9.2.1 can be found below.
Step 3: Once you are done with the update, make sure you are connected to a WiFi network.
Step 4: Open Safari on your iPod touch and navigate to http://jailbreakme.com.
Step 5: “Slide to Jailbreak” to begin the jailbreak process:
Step 6: Wait till the jailbreak tool download the required files..
Step 7: Once the download is completed, it will automatically start the jailbreak process. Just don’t do anything silly at this point. Wait till the jailbreak process is completed.
Step 8: Once done, you will be greeted with the following message.
Step 9: Close the browser and look for Cydia. You should now have it on your phone!
Here is the video, showing all the above instructions in detail: