The Dev Team, specifically MuscleNerd, has released a video via qik.com of a jailbroken iPod Touch 2G (2nd Generation). Unfortunatly the jailbreak only works when tethered (connected via USB) to a computer. They are working on a fix for this but have proven the jailbreak to work by running terminal, Cydia and an NES Emulator (Nintendo). Let us know if the comments if you have an iPod Touch 2G waiting to jailbreak. Here’s the video:
Watch “redsn0w demo — first iPod Touch 2G jailbreak” from your iPhone or iPod Touch