Connect the iPod to iTunes, look on the Device/Summary screen and click on the Check for Update button.
If - and I stress if - you have a 2nd generation iPod Touch, the message will tell you that there is an update and give you the option to download it and install it on to your iPod. However, if the message says you have the latest version installed, then you have!
1st gen Touch can only install up to iOS 3.1.3
2nd gen Touch can only install up to iOS 4.2.1
It's not clear from what you've said, when you see the 8288 error, so when is that?
If you need to identify you model of iPod, check http://support.apple.com/kb/HT1353 .