There currently isn't a jailbreak method for i OS 8, so anyone with a jailbroken i OS 7 device that wants to update to i OS 8 will lose their jailbreak.Just make sure to create a list or take a screenshot of all your jailbroken apps and Cydia downloads so you can go back and get them once a i OS 8 jailbreak method is released.There are two ways to update your system, just make sure that your device has at least 50% battery and that you've cleared plenty of storage space—you'll need anywhere from 3 to 7GB free, depending on device.
You will need to update i Tunes to version 10.5 before you update your i Pod. To check the i Pod version number follow this KB article. You can browse the web with Safari and watch You Tube videos with Wi-Fi.You can also search, preview, and buy songs from the i Tunes Wi-Fi Music Store on i Pod touch. I believe that it should be possible to run i OS 5 on this, and I have bought an app that requires i OS 5.However, in i Tunes, when I click on the i Pod device, it says that my i Pod software is up to date. I'm registered with Apple with a Belgian account, though I hope this wouldn't make a difference to updates. According to Apple, the 3rd gen i Pod Touch can be upgraded to i OS 5.I have an i Pod Touch 4th Gen that has i OS 5 by default.