First download the 1.1.3 firmware from the download section. Put the phone in DFU restore mode by holding down the home and power buttons at the same time until the phone powers off, then release the power button but continue to hoold the home button. After 15-20 seconds iTunes should come up and ask to restore your phone. Hold the SHIFT button and click "restore" and then manually select the 1.1.3 firmware file you downloaded.
After this become a member of
www.ipodtouchfans.com as they have much more support for the iPod Touch. Good luck.