I hope I didn't find you too late, Krrishlnd or anyone else interested, but when I inadvertently updated some apps beyond my 2nd generation iPod's iOS 4.2.1 capability, since I also have a new 3rd generation iPad, and my iTunes dutifully tries to update those apps beyond my iPod's capabilities--or if an app's "improvements" are worse than the previous version, I go to the trash on my Mac's desktop and open it. Yes, my iTunes normally catches the apps in question, and will state that the app is incompatible with my Touch, but occasionally an app slips through. In your Trash, unless you empty it regularly, you'll find iTunes' discarded previous versions of your apps. In fact you may find several earlier versions of the same apps in question, if it has been an unusually long time since you've emptied your trash. Newer Mac OS 10.X doesn't routinely empty the Trash like OS 9 and earlier used to do on shutdown and restart, so there's hope here. The discarded apps have abbreviated names you'll probably recognize, all with .ipa extensions at the end. They aren't overwritten when iTunes updates your iOS devices; iTunes just removes them and places them intact in the Trash.
What I do is make up a new folder (call it something like "iOS apps recovered from Trash" or whatever you like), either on my desktop or on an external harddrive, and select pretty much every app in my Trash (look for the extension .ipa) and haul them out of the trash to the new folder. From there (you can't open or use files directly from in Trash--your computer will just let you know you can't do it), just double-click on the older version of the app you want to reinstall on your 2nd generation iPod Touch. Your iTunes will ask if you want to replace the newer version with the older one. Click OK and then plug in your iPod Touch and let iTunes update it. I've restored apps back to working versions when app authors have mistakenly released newer versions too buggy or incompatible (despite being advertised otherwise) with my iPod Touch on several occasions using this method. If you create the folder on your desktop, the selected Trash's contents empty into it. If on an external harddrive, the originals remain in the trash--you may empty the Trash now that you've made the back-up folder.
If you have previously discarded the Trash contents, your only option now is to search on the Internet for archived copies of the apps in question. Just make sure your antivirus software is up to date, since one never knows where these apps have been...
I hope this helps. This method has spared me many headaches over the past couple of years. Hope your kid, in the mean time, hasn't yelled at you so loudly you have had to take away his/her iPod for bad attitude. Good luck.