A couple of short weeks after the iPhone 3g unlock with yell0wsnow talk of the dev team's iPod Touch 2g jailbreak code-name redsn0w surfaced.
Tonight MuscleNerd posted the above video on his Qik account detailing the iPod Touch 2g jailbreak. While it's coming soon the dev-team has to get past one major issue before being able to release the jailbreak into the wild. Currently every time you boot the device you have to apply the redsn0w patch using a computer. They are working on the issue after which the iPod Touch 2g Jailbreak can be released!