You can try the standard fixesto rule out a software issue:
- Reset. Nothing will be lost
Reset iPod touch: Hold down the On/Off button and the Home button at the same time for at
least ten seconds, until the Apple logo appears.
- Restore from backup
- Restore to factory defaults/new iPOd
If you still have the problem than it is a hardware problem and replacement is required. Apple will exchang it for a refurbished one for: