The iH8Sn0w has upgraded Sn0wBreeze v1.7 jailbreak tool for iPod Touch 3G over iOS 4. User can create custom iOS 4 with Sn0wBreeze v1.7 to jailbreak iPod Touch 3G but it is necessarily important that your iPod Touch 3G should be on iPhone OS 3.1.2, otherwise you have to save SHSH blobs of OS 3.1.2 of your iPod 3.
Sn0wBreeze v1.7 also supports iPhone 3GS (Old BootRom), iPhone 3G and 2G, iPod Touch 2G (non-MC) and iPod Touch 1G, and also works for Spirit jailbroken devices.
Sn0wBreeze is a jailbreak tool for Windows so after completing iOS 4 jailbreak process you may unlock iOS 4 device through UltraSn0w.
Note: Sn0wBreeze v1.7 is a tethered jailbreak for New BootRom.
Download Sn0wBreeze v1.7