how do you reset ipod after it is disabled

Back it up and restore it using iTunes on the last computer it was synced with after setting you passcode. If you can do this, use one of the other methods at the bottom of this article: http://support.apple.com/kb/HT1212.

Turn it off and connect it then to your PC/Mac. Open iTunes. Hold the home and the power button for 10 seconds till iTunes come up with a message that it detected an iPod that needs to be restored. Restore it and you are good to go.