UPDATING AN OLDER IPOD TOUCH

I'm trying to update my nephews ipod touch. I have tryed to purchase apps, it always says "this app requires ios 4.3" I have tryed to update it thru the ipod,under settings, general, but then there is not a update link.. I dont know if it is because this ipod is older or what. I have even tryed to purchuse this games into my itunes and sync to his ipod and that will not work either. How can I update this ipod. or at least find him some games that are compatible with it? this ipod doesnt have a camera, dont know if that would matter