What does it mean if you click renew lease on ipod touch wi fi?

If you press "Renew lease", your router will assign a new IP address for your ipod.

More info here: http://applefanatic.org/ipod/what-does-renew-lease-for-ipod-touch-mean-t45990.ht ml

Very very seldom do you get a new IP address. You just renew the time period the router will allow you to use that IP address. The routers normally give a set time period (24 hours is common) so that if you leave the network (Turn off wifi) the router keeps that IP address from being used. If you do not come back within the time period the router can assign that IP to someone else who joins the network.