These instructions are copied from Apple's website.
To update your iPod touch:
Step One
Make sure you have an Internet connection and have installed iTunes 7.4 or later from www.apple.com/itunes. Apple recommends using the latest version of iTunes.
Step Two
Connect iPod touch to your computer.
Step Three
In iTunes, select iPod touch in the source list and click the Summary tab.
Step Four
Click "Check for Update." iTunes tells you if there's a newer version of the iPod touch software available.
Step Five
Click Update to install the latest version of the software. Follow the onscreen instructions to complete the update process.
Step Six
You can verify the software version installed on the iPod touch by choosing Settings > General > About from your iPod's menu.
To update your iPod touch:
Step One
Make sure you have an Internet connection and have installed iTunes 7.4 or later from www.apple.com/itunes. Apple recommends using the latest version of iTunes.
Step Two
Connect iPod touch to your computer.
Step Three
In iTunes, select iPod touch in the source list and click the Summary tab.
Step Four
Click "Check for Update." iTunes tells you if there's a newer version of the iPod touch software available.
Step Five
Click Update to install the latest version of the software. Follow the onscreen instructions to complete the update process.
Step Six
You can verify the software version installed on the iPod touch by choosing Settings > General > About from your iPod's menu.