Jailbreakme Jailbreak iPad, iPhone 3G, 3GS, 4, iPod Touch 2g, 3G, developed by iPhone dev team. Its worth noting that Jailbreakme uses an exploit that would be fixed by Apple in future releases. so make sure you save SHSH for your iPod touch 2G, iPod touch 3G including MC model.
How to Jailbreak iPod Touch 2G, iPod Touch 3G iOS 4.0.1
Step 1. Navigate to www.jailbreakme.com through your device’s browser.
Step 2. Swipe your finger across “Slide to jailbreak”, and wait while your device downloads the data necessary to execute the jailbreak procedure.
Step 3.Once complete, lookout for “Jailbreaking Sit Tight. ”
Step 4. Within few seconds, installation finishes and a new popup will inform you that Cydia icon is added to the Home screen.
That’s all, you are done! Enjoy your Jailbroken iPod Touch 3G