Because it's a 1g iPod the highest firmware you can update to is 3.1.3. So download the 3.1.3 firmware and update the iPod via iTunes (hold shift and update>then find the 3.1.3 firmware that you downloaded).
Then download 'Spirit or Blackra1n' (either will work), and follow the on screen instructions.
Spirit download - http://spiritjb.com/
Blackra1n download - http://www.blackra1n.com
3.1.3 Firmware download - http://www.felixbruns.de/iPod/firmware/ (make sure you go on the second drop down menu, NOT the first, you're looking for 'IPOD TOUCH 1st GEN 3.1.3)
Hope I helped.








