The iPhone 4 and the new 4.0 firmware was released yesterday at WWDC. Now if you want to update your iPod Touch 1G/2G/3G to 4.0 firmware, then here is how to do it. Just do the instructions given below to update iPod Touch to 4.0 firmware.
1. Make sure you have the latest iTunes.
2. Download 4.0 firmware for iPod Touch 1G, 2G or 3G.
3. Connect your iPod Touch to the computer.
4. Select your iPod Touch from the devices list on iTunes.
5. Now hold the Shift button and click on Restore.
6.Now browse and find the .ipsw file of 4.0 firmware and choose it to update iPod Touch to 4.0 firmware.
Now wait till iTunes update iPod Touch to 4.0 firmware and when finished, you’ll have an iPod Touch running 4.0 firmware on your hands.