Software Update is saying that you have the latest version for 10.5, which is 10.5.8. Version 10.6 is a paid upgrade. Buy here: http://store.apple.com/us/product/MC573/mac-os-x-106-snow-leopard (by the way, Mac OS X is the operating system for Macs, not iOS. iOS powers the iPod touch, as well as the iPhone and iPad).
It will ship version 10.6.3. Run software update after you install that in order to get 10.6.8.