I downloaded the file iPod1,1_2.0_5A225_Restore.ipsw off of TPB. I loaded it in WinPwn, then went to IPSW Builder and added boot and restore images. I told it to build the ipsw file and then opened iTunes. After shift clicking on restore and selecting the custom 2.0 file, iTunes begins the normal process of restoring except, when it puts my iTouch into restore mode, iTunes still says "Preparing iPod for restore" until it times out and gives an error code.
Has anyone else had this problem and can anyone help me?