You can restore your iPod? This does take some time, but your data won't be lost.
The iPod Touch backup includes information such as mail settings, text messages, notes, sound settings, widget settings, certain network settings, and other preferences including settings and data from third-party applications and photos in your saved photos album. These will be restored from the backup. Your music, videos, and applications as well as your Contacts, Calendars and Photo Albums will be reloaded by iTunes as they were before the restore. This article gives all the details and shows you the screens you will see during the restore:
http://support.apple.com/kb/HT1414
For details about the backup file, see this:
http://support.apple.com/kb/HT1766
