As long as you don't go into goblin engineering, I am very sure that you will succeed in jailbreaking your phone. I personally never tried jailbreaking my Iphone but I know a few people, a few unintelligent people, who jailbroke theirs with no problem.
However, do not come running to me crying if you brick your phone ;P
if it's 4.0.1 or older, then www.jailbreakme.com will do it for you. visit there on the itouch and slide the little slider and let the site work it's magic. i'm still running my phone on that and it's worked like a charm
The risk is fairly low that youll brick your phone or ipodtouch. Point your devices browser to http://www.jailbreakme.com, and slide the bar to jailbreak it. It will automatically download the stuff and execute the program to jailbreak it. ONLY DO THIS IF... you are not using any iOS past 4.0.1, that website currently doesnt support 4.0.2 or 3. 4.0.3 is currently jailbreakable but its harder to do so i hear. Oh and jailbreaking voids your manufacturers warranty or Apple Care if you have it.
Heh, I'm still at 3.1.3 and I have jailbroken my 2nd generation iPod Touch.
I jailbroke it with Spirit (which doesn't work on 4.x). So there are also programs for PC and Mac you can download and let them do the jailbreaking.
Jailbreaking gives you at first hand no other options than one App appearing in your Springboard (your menu where the apps are): Cydia. An online store like the App Store, but only accessible via jailbroken devices.
Commonly downloaded apps (I think) include (just out of my head): Winterboard (for wallpapers, even if you device doesn't "support" it) and SBSettings, think System Preferences but then way more options (e.g. hide the Stocks app if you don't use it). Lastly Activator, for creating custom gestures. (Like say by tapping the clock in your lock screen, you can directly skip to the next song in your music library if you play something).
Cydia apps sometimes have plug-ins which enhance the apps you already have or downloaded. For example, Activator can work good at its own, but when you have SBSettings installed, it cannot only enhance gestures for music/video/... control, but also for the options of SBSettings.
SBSettings itself has no icon. You can still find it via Spotlight, so beware when you download it and nothing happens.
When syncing to iTunes, none of the Jailbroken apps will sync too. They stay on your iDevice, but you don't have a backup of them in iTunes.
Lastly, if your iPod becomes broken (not jailbroken, I mean damaged), you can still recover your software, and so removing your jailbreak, and bring it to the Apple Store in your neighbourhood. No-one will ever know it was jailbroken or not if it's recovered. So if you worry about legality, no worries after a recovery.
And a last tip: ask around. If I ask Apple employees directly about their experiences with jailbreaking and legality, most of them think something about they don't support it, but if a device has been jailbroken and there is a hardware faillure not because of the jailbreaking (like a broken screen), they don't really mind fixing it. You'll get a new one (same generation as the one you had before), completely erased from all contents, so you have to re-sync it and re-jailbreak it (since jailbroken apps don't sync with iTunes as explained earlier). Other than that, it's totally fine.
I thought it wasn't illegal anymore? They just really hate it when you do it, so if you break your phone and go try to get it fixed and they see that you jailbreaked it, they wouldn't even help you.
yea it is legal, its frowned upon so yea they prob wont fix ur shit if its broke with jailbroken stuff on it, so jus restore before takin it in if u can that is
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goin to jailbreakme now 
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