how do you unlock ipod when it says connect to itunes

Do as the manual says to do and restore the ipod.

If you are unable:

Type "unable to restore" into the search bar at the top of this page by Support and read the resulting help article.

Place the iOS device in Recovery Mode and then connect to your computer and restore via iTunes. The iPod will be erased.

iOS: Wrong passcode results in red disabled screen

If recovery mode does not work try DFU mode.

How to put iPod touch / iPhone into DFU mode « Karthik's scribblings

nice post.

Follow this and your ipod will be up and running in about 20min 😉