Purchased used ipod touch /purchase apps form itunes problem

my wife purchased a used ipod touch a while back,I set her up with a new itnues account,put in the computor the music she wanted, and hooked the two together autherized the computer and it started doing its thing.which included updateing the ipod .What has happened is it removed the apps the former owner had down loaded and it will not let us down load any new apps into the ipod.When trying to down load from the ipod through the apps icon by wifi the former owners email(itunrs account)? comes up and is asking for there password.How do i change this to our itunes account and password??I can purchase apps from Itunes on the computer but it also will not sync to the ipod either.is that also because of this?? Thanks for any help!!