JailBreak
First of all you want to make sure that your ipod/iphone is at the latest jailbreakable version. You can download ipsw's from this website:
http://www.felixbruns.de/iPod/firmware/
From this website you should download the ipsw firmware file that you need.
Save this file to your desktop or any other convenient area.
Once you have done this open itunes. Make sure your ipod/iphone data is backed up. Open the sync page. Once you have came here, hold down the shift button while you click restore.
When you do this, it will ask you to find an ipsw file that you have. This is where the file you downloaded earlier comes in. Select the ipsw that you want from wherever you saved your file.
Once this ipsw has been selected, wait till itunes updates and syncs your ipod/iphone. Once this action has been completed, you will need to download the jailbreak tool known as redsn0w. You can download it here:
Once you have downloaded this, you are ready to jailbreak your ipod/iphone.
Open the file that you have just downloaded. The first page will look like this:
When you see this page, you need to select the ipsw file that you downloaded earlier. Once it accepts it as the correct file, just follow the instructions that it shows you. Make sure you check the box that says [download cydia].
At the end your iphone/ipod touch will look like this:
**IF YOU HAVE AN IPOD TOUCH YOU ARE DONE AS OF THIS STEP**
IPHONES ONLY
If you want your iphone to be able to run other carriers, you will have to continue to this step.
The following instructions are executed in cydia
1. Add the repo repo666.ultrasn0w.com to your sources list. That last “o” is actually the number zero “0”! If you use the letter “o” you’ll get an error.
2. Search for ‘ultrasn0w’ in cydia and install it (once again, that “o” is actually a “0″ = zero)
3. Reboot your iPhone
4. T-Mobile USA users should disable 3G before using ultrasn0w
-->go to settings > general > network and disenable 3G
5. Enjoy