Apple iOS 4.0 aka iPhone OS 4.0 which went live yesterday is a free upgrade to iPhone 3G, 3GS & iPod Touch 2G & iPod Touch 3G. However not all features will be available to iPhone 3G & iPod Touch 2G. the best of all is unlockers and jailbreakers can safely update iPod Touch to 4.0 iOS since both Ultrasn0w 0.93 unlock tool & Redsn0w 0.9.5 Beta 5 jailbreak tool compatible to iOS 4.0 final has been released by iPhone Dev team.
How to Jailbreak iPod Touch 2G 4.0 iOS with Redsn0w
4. Now follow our guide to manually update iOS 4.0 on iPod Touch 2G.
5. Once you have updated iPod Touch 2G to iOS 4.0 start Redsn0w 0.9.5 Beta 5.
6. Click on Browse button and select iPod Touch 4.0 firmware for iPod Touch 2G (iPod2,1_4.0_8A293_Restore.ipsw) downloaded in step 1.
7. Now Click on next and Redsn0w 0.9.5 Beta will prepare data for jailbreak.
8. Now select “Install Cydia” and if you want you can activate Multitasking, Battery Percentage & Homescreen wallpaper and click Next.
9. Now follow onscreen instructions and complete iPod Touch 2G 4.0 jailbreak process.
Your iPod Touch may reboot several time once completed add http://apt.saurik.com/cydia-3.7 repo to Cydia. Now enjoy your jailbroken iPod Touch 2G with iOS 4!