What i Belive Jailbreaking is, is that all the application that apple won't accept on to there App Store, is put on cydia. all the applications that change the ipod in dramstic way. you can change font, you can add fonts, you can make your very own themes, you can add various emulators (NES PS N64 etc), you can put iphone applications on ipod touch, you can add helpful utillities like SBsetting, you can change the smallest detail, Spring board indicator to the whole weather application, you can have Many many more plugins in safari, you can hide application, you can download videos and whatch them offline, you can add more web broswers for the ipod, you can change sounds, you can make you ipod louder, you can rotate you sping board, you can... you can do what ever you want to do.
An apple iPod Touch is Amazing, A Jailbroken iPod touch Out Standing!
It is free to jailbreak the apple product.
Jailbreaking the apple product does not limit the app store use, you are allowed to use it still.
And if you are worried about having your ipod break and the warranty not cover it, all you do is restore it off itunes and no one will ever know it was jailbroken.