1. Make sure iTunes is up to date and pwnage tool is somewhere on your mac
2. Leave your iPod unplugged from your mac
3. Launch pwnage tool
4. Click on the iPod Touch image
5. Click the next arrow as in structed on screen
6. Let pwnage tool find the 2.0 firmware on your mac
7. When found click on the firmware for 2.0 build 5A347 or build 5B108 for 2.0.1
8. Click next arrow
9. The pwnage tool will now inform you it will create a ipsw file to use for restore in iTunes..... click yes and pwnage tool will start building your ipsw restore file
10. At some point you will be prompted for a password this is just the password for the mac account you are signed in under
11. Pwnage tool will as if you have pwned yout touch before, if yes click yes (and restore in iTunes) if no go to step 12
12. Open iTunes and then plug iPod in, and close iTunes as soon as its recognized (click quit if it complains about syncing when exiting)
13. Pwnage tool will have on screen instructions on how to put iPod into DFU mode
14. The follow the DFU instructions until they no longer appear. The DFU instructions will not be displayed after the iPod screen has powered off (As if the ipod has been turned off. This is normal)
15. Turn off the iPod by holding the sleep key and then sliding to power off.
16. Once the ipod has fully turned off hold the home and sleep buttons for 10 seconds
17. After 10 seconds let go of the sleep button only and keep holding the home button for 10 more seconds and itunes will pop up saying iTunes detected in recovery mode.
18. Then holding down the alt key click restore and point itunes to the custom ipsw and click ok and let iTunes restore (this may take some time)
Here is the app
http://xs1.iphwn.org/appcast/release/PwnageTool_2.0.2.tbz