If your iPod is Jailbroken, use iTunes to restore it to 1.14 before applying the update, or you can damage your iPod.
Using iTunes 7.7, hold shift (in Windows) or option key (alt) in OSX while pressing check for updates in iTunes, then select the .ipsw file. Be patient as it can take several minutes for the FW to install.
*Use at your own risk. I take no responsibility for any possible damage caused by this file*