Make sure you are following the instructions in this procedure to the letter. Here they are, with emphasis on some easily overlooked requirements:
- Disconnect the USB cable from the iPod touch, but leave the other end of the cable connected to your computer's USB port.
- Turn off the device: Press and hold the Sleep/Wake button for a few seconds until the red slider appears, then slide the slider. Wait for the device to turn off.
- If you cannot turn off the device using the slider, press and hold the Sleep/Wake and Home buttons at the same time. When the device turns off, release only the Sleep/Wake button.
- Continue pressing and holding the Home button while you reconnect the USB cable to the device. The device should turn on.
- Note: If you see the "low battery" screen, let the device charge for at least ten minutes to ensure that the battery has some charge, and then start with step 2 again.
- Continue holding the Home button until you see the "Connect to iTunes" screen. When this screen appears (iTunes icon and USB connector) release the Home button.
- If necessary, open iTunes. You should see the "recovery mode" alert ("iTunes has detected a phone in recovery mode").
- Use iTunes to restore the iPod touch.
If you do not see the "Connect to iTunes" screen, try these steps again. Be patient since it sometimes takes several of these attempts before you are successful.
If you see the "Connect to iTunes" screen but the device does not appear in iTunes, see this article and its related links.
Select the device in iTunes and choose "restore from backup".
If you still can't get it to work, you have done all you can and only Apple will be able to help.