NOTE:  DO NOT UNDER ANY CIRCUMSTANCES USE THE 3.0 BETA ON YOUR IPHONE.  YOU WILL BRICK IT.

That out of the way…

I found the iPhone 3.0 firmware beta after a bit of digging.  For legal reasons, I can’t link it to you, but I’d wager if you were a Pirate in the San Francisco BAY you might figure out where it is.  Or just go to Livecrunch, they’re not afraid to point it out.

It’s a really simple process; find and get the firmware, go to iTunes, hold SHIFT, click UPDATE(NOT RESTORE!) and navigate to the firmware from there.  At time of writing(3/19/08) the jailbreak isn’t available for this version of the firmware yet.  At least not for Windows.

So I’ve installed it; the only issues I’ve had so far are A) I can’t access my music.  Big problem. Upon re-syncing my music, it shows up.  Wooo. B) I can’t let it connect to the iTunes store.

With regards to my music, the only curiosity of the situation to me is that the music is *there*- iTunes recognizes it, shows that I have 4~ GB of music on it, but it’s not showing up on the iPod to play.  When I get home, I’m going to try re-syncing my library and see if that fixes it(or in the meantime, I’ll try to find something like sharepod to copy the music off and re-sync).  I’ll update on this when I get a second at home.

As far as connecting to iTunes, it’s simple to circumvent- when you plug in your touch and the status above shows “Connecting to the iTunes Store…” click the X to the right of the text.  Syncing still works.

Downsides from 2.2 -> 3.0: jailbreak isn’t available, meaning no Cydia, no Winterboard, no BossPrefs, etc.  I’ll wager this problem will go away as soon as the iPhone Dev Team have a chance to work on it. 
This whole pesky iTunes Store problem.  However…
EDIT: Can’t get YouTube to work.  Waiting for a workaround.

Upsides from 2.2 -> 3.0: iTunes still works ON the touch, and should still work without having the Touch connected to the PC- download your tunes, connect, sync.
BLUETOOTH, BABY!  Confirming this, it works, love it, sucks for you if you don’t have it.

(pops to larger)
Also: now pressing home from the main screen takes you to a new “Search iPod” Screen.  Handy when you have 10+ pages of apps/bookamrks. 
Numerical battery gauge in addition to the battery icon.
CUT/COPY/PASTE.

Still playing with this, I’ll update more as the situation updates.

Hey guys.  I’m seeing a lot of people having problems with this GUI jailbreak method- I totally understand, and it’s kinda confusing at points.  I’ll walk you through it step by step.  Again, I assume no liability whatsoever for any damages you may incur during this process.

*** If at any point your iPod bricks, try the following before you panic.  Hold the power and home keys for 10 seconds, then release power and continue holding Home for another 8 seconds.  Make sure your iPod is connected to your PC for this, and iTunes will recognize it as being in recovery mode.  Restore your iPod to an older official Apple firmware.  You’re good to go, I know because I did this on my first attempt. ***

Step 1: Make sure you close iTunes any time it starts up throughout this whole process.  Go ahead and install the libUSB and the C++ redistrib packages.  If you already have them, it’ll just overwrite them with no problems.  Click next step.

Step 2: You’ll need to let the program hack your firmware.  From what I can tell, this works ONLY with the ipsw file named iPod2,1_2.2.1_5H11a_Restore.ipsw.  You can find it from Apple here. Make sure you put it in your redsn0w2 directory.  Click on this firmware, and click “Start making IPSW file.”  When it’s done, click next step.

Step 3:  With your iPod connected to your computer, hold the power and home buttons for 10 seconds, then release power while still holding home for another 8 seconds.  After 8 seconds, let it go, and it’ll be detected by iTunes in recovery mode.  Close iTunes.  Click “Upload DFU file” and wait for it to finish.  Unplug your iPod from your computer, count to 3, and plug it back in.  Close iTunes, then click “Upload 0wn Patch (bin).”  When it’s done, click next step.

Step 4:  Click the “Press Me” button.  It’ll bring up a console screen.  Just right click in this window and select “Paste.”  After this finishes, start iTunes.  It’ll take you to the recovery screen.  HOLD SHIFT and click “Restore.”  Navigate to your redsn0w2 directory(the GUI will tell you where it is) and select “jailbroken.ipsw” and wait for your iPod to restore.  When it’s done, close iTunes and click next.

Step 5:  This is pretty much a repeat of Step 3.  With your iPod connected to your computer, hold the power and home buttons for 10 seconds, then release power while still holding home for another 8 seconds.  After 8 seconds, let it go, and it’ll be detected by iTunes in recovery mode.  Close iTunes.  Click “Upload DFU file” and wait for it to finish.  Unplug your iPod from your computer, count to 3, and plug it back in.  Close iTunes, then click “Upload 0wn Patch (bin).”  When it’s done, click next step.

Step 6:  Click “Press Me.”  Right click in the console window and click “Paste.”  Wait.  When it’s finished, click next step.

Step 7:  IGNORE THE RED TEXT, YOU ARE ALREADY IN DFU MODE.  Click “Upload Patched DFU.”  When it finishes, click the first “Enter go and /exit” button.  The console comes up again, just type “go” and press enter.  A few seconds later, type “/exit” and press enter.  Click the “Upload Patched IMG File” button and wait for it to finish.  Click the second “Enter go and /exit” button.  Do this again- type “go” and press enter, wait, then type “/exit”.  Restart iTunes, and your iPod Touch 2nd Gen is jailbroken!

IMPORTANT: Any time you restart your iPod Touch with this tethered jailbreak, you’ll have to restart the GUI and repeat steps 5-7.  This will no longer be a problem if/when the untethered version of redsn0w is released.  Enjoy!