ok a few things
1. youve posted in the iphone section and youve got an ipod
2. youre downgrading when you really dont need to
3. you get error 1 because youre not in DFU mode
to fix:
restorediPod touch to 1.1.3 using iTunes.
Step One
Download ZiPhone from: http://rs388.rapid$hare.com/files/91327136/ZiPhone.zip
replace the '$' with an 's'
Step Two
Double click ZiPhone.zip on your desktop to extract the folder ZiPhone..
Step Three
From the extracted ZiPhone folder double click ziphoneGUI.exe to launch the application.
Step Four
You must put your iPod touch into recovery mode. To do this please hold down both the Sleep/Wake for 3 seconds. A power slider will appear. Slide it to the right to power down the iPod. Then keeping ONLY the Home button pressed, connect the iPod to the dock. Keep the home button pressed until you see the iTunes logo and cable on the screen.
Step Five
You can now jailbreak! Just simply check the Jailbreak and Verbose checkboxes. Then click the Start button.
Step Six
The program will now load zibri.dat. Then it will search for the iPod touch. Once found it will tell you to wait for 45 seconds.
Step Seven
After this time your iPod will reboot and it will be jailbroken!!!!