How to downgrade an iPod from firmware 1.1.2:

- Make sure that your iPod Touch is powered on and that it is connected to a computer running iTunes 7.5
- Download the iPod1,1_1.1.1_3A110a_Restore.ipsw 1.1.1 firmware file
- Start iTunes. When iTunes is started, it will automatically navigate to the iPod touch screen. Hold down 
  the shift key and click the "Check For Update" button. It will open up the File dialog. Navigate to the 
  1.1.1 firmware, select it, and click OK. iTunes will automatically reboot your iTouch and load the 1.1.1 
  firmware.
- Jailbreak the iPod by going to http://jailbreakme.com, which installs Installer.app to your home screen.
- Start Installer
- Install the following things:
  * BSD subsystem
  * OpenSSH
  * Community Sources (may already be installed)
- Reboot the iPod, you can now SSH in using PuTTy. Note that the first ssh connection will take a bit of time 
  since the host keys will be generated. The default username and password are root/alpine

After the jailbreak:
- SSH to the iPod
- Change the password using the 'passwd' command.
- Free up space by moving the fonts dir. Not doing this *will* make you run out of space *fast*:
  # mkdir /private/var/Fonts
  # cp -Rp /System/Library/Fonts/* /private/var/Fonts/
  # mv /System/Library/Fonts /System/Library/Fonts.backup && ln -s /private/var/Fonts/ /System/Library/Fonts
  # mv /System/Library/Fonts.backup /private/var/Fonts.backup
- Replace the default iPod settings with the more detailed iPhone settings:
  # cp /Applications/Preferences.app/Settings-iPhone.plist /Applications/Preferences.app/Settings-iPod.plist 

Extra Installer sources you want to add:
- Start Installer
- You can add new sources by tapping 'Sources', tapping 'edit' and then tapping 'add'
- Add the following sources:
  - http://applerepo.com (iPhone software)
  - http://iphone.r4m0n.net/repos (iPhysics levelpacks)

Done!