How to update iPod touch wirelessly

You can. Go to Settings > General > Software Update if you have iOS 5 or later. If not, connect the iPod to the PC and iTunes will ask you to update to the latest version

Your profile indicates your have iOS 4.1. You need iOS 5 or later to update wirelessly. But if you have a 2nd generation iPod touch, the latest version for that iPod is iOS 4.2.1.