The 2nd generation iPod touch proved a tricky customer to break, but the Dev Team has made the first big step toward a full-on jailbreak.
The Dev Team stumbled upon the break when making yellowsn0w, the iPhone jailbreaker, but says the touch's jailbreak is far too manual to be done by most people at this point. But this is the first big breakthrough and it's become a focus of the Team's efforts. Once again, Apple can't seem to make anything the Team can't break. [iPhone Dev Team Blog]