here is how i jailbroke my ipod 2g:
1.upgrade my firmware from 2.2.1 Jailbroken to Unjailbroken 3.0 (Get 3.0 FW from http://www.felixbruns.de/iPod/firmware/)
2. Jailbreak 3.0 FW
3. upgrade to custom 3.1.1 Firmware from Hackulous. (http://hackulo.us/forums/index.php?showtopic=41726&st=0 you will membership, but its free and i recommend u sign up)
4. you are JAILBROKEN!

OPTIONAL (install cracked apps):
5. go to hackulous repo (from cydia put in: cydia.hackulo.us) and install appsync for FW 3.1.1
5. Reboot i device
6. Install Cracked apps