
This process will work for the iPod touch and iPhone 3G except the new iPhone 3G S
Before we begin you will need the following files.
Downloads:
RedSn0w 0.7.2 (Jailbreak Tool):
MAC version: http://rapidshare.com/files/253209975/redsn0w-mac_0.7.2.zip
WIN version: http://rapidshare.com/files/253210939/redsn0w-win_0.7.2.zip
3.0 Firmwares:
http://www.felixbruns.de/iPod/firmware/
Select the firmware then download
DFU Mode Instructions:
Plug iPod into comp
Hold down the power and home button for 10 secs
Let go of the power button keep holding the home button for another 7 secs
***This will be important for the last step in RedSn0w
You will also need iTunes 8.2
Attention! In order for the process to work successfully you will need to restore the iPod touch/iPhone. By restoring the machine you will lose all of the data stored inside. If the machine is not restored, the OS will clash with the new instructions being installed. I recommend you back up all of your music and documents without using iTunes.
Installing The Firmware
Now that you have downloaded all of the necessary files lets begin. The first thing we will do is install or upgrade the existing firmware to 3.0. Open up iTunes and make sure the iPod touch/iPhone is connected. Installing the firmware means restoring the machine and to do so [For WIN Users] Press and Hold Shift+Restore on iTunes.

Click on pic to expand
[For MAC USERS] Instead of Shift, you should hold down the Option button. A window should immediately appear asking you to select the Firmware you downloaded earlier. Search for the firmware file titled: iPod2,1_3.0_7A341_Restore.ipsw and click ok. Let it run it should take around 10 minutes. When the process has finished allow the iPod touch/iPhone to boot up. After it boots it should connect to iTunes.

Now we have to finish setting up your iPod touch/iPhone. Select "Set up as a new iPod"

In the next step uncheck all of the boxes [there should be three], name your iPod and continue.

That should conclude the installation of the firmware. The iPod touch/iPhone has not been jailbroken yet.
Jailbreaking The Machine

Open up redsn0w 0.7.2 and browse for the firmware once again.

Once you have selected the firmware and resn0w has finished its process click next. On the next screen you will have to check on both Icy and Cydia like so:

RedSn0w will guide you on the following steps. You will have to follow the DFU instructions, which I have provided in the beginning of the tutorial, and RedSn0w will guide you through them as well.
After you see this image allow the iPod touch/iPhone to reboot and click finish on RedSn0w.

You have now Jailbroken your iPod touch/iPhone but we are not done! We have to repeat the process, but this time with ICY unchecked like so:

When you Jailbreak the iPod touch/iPhone the first time with both Icy and Cydia checked there is always and error when using CYDIA this is due to some permission errors. But re-jailbreaking it with only Cydia will fix the permissions on the device. After you are done you will have a perfectly jailbroken iPod touch/iPhone.
//Thanks go to Luie Rocha\\
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