1. Is it possible to jailbreak the iPod Touch 2G?
Yes it is possible but the jailbreak has not yet been released. The iPhone Dev Team is working on automating the jailbreak. The jailbreak is codenamed redsn0w. Once the iPhone Dev Team has figured out how to automate the jailbreak they will release it.
2. When will the iPod Touch 2G jailbreak be released?
There is no estimated time. The official place to check for updates is the iPhone Dev Team blog at http://blog.iphone-dev.org. Join our iPod Touch forums while you’re waiting for the jailbreak to be released.
3. I saw someone on YouTube with a jailbroken iPod Touch 2G, is it real?
No, it’s a fake! People have too much time on their hands and they like to fool others. Don’t believe the YouTube videos and comments, they’re all fake. Only trust the iPhone Dev Team blog.
If you have any more questions here is a website detailing all the redsn0w iPod touch 2G jailbreak questions:

