Try the following to rule out a software problem:
- A reset. Nothing is 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 settings/new iPod.
If you still have the problem that indicates a hardware problem and an appointment at the Genius Bar of an Apple store is in order
Apple will exchange your iPod for a refurbished for this price:
A third-party place like the following may be less expensive. Google for more places.
To fix it yourself :