Connect your iPod to iTunes, look on the Device/Summary pane (tab) and click on check for updates.
If an update is shown, then you will be given the option to download it and it will be installed on your iPod. (It will be iOS 5, not iOS 4.3)
But, if you see a message telling you your iPod is up to date and you have iOS 4.2.1, then you have a 2nd generation iPod Touch, not 3rd. If you have an 8Gb iPod, then it's either a 4th gen (in which case, you are unlikey to think it's 3rd gen) or you have a 2nd gen Touch, since Apple have never made the 2nd generation Touch with 8GB capacity. Also, the 2nd gen Touch has the model No. A1288 etched onto the back casing. A 2nd generation Touch cannot installl iOS 4.3.
(The 3rd gen has model No. A1318 on the casing.)
Go to http://support.apple.com/kb/HT1353#iPod_touch_late2009 for further help in identifying your model.