Q: How do I download apps on to the iPod touch 1st generation

Same way as before. Either purchased them directly from the iPod via the App stor app or download them n your computer/iTunes and sync the,. However, you have to fnd copatibel apps. Many are not copatible. To find compatible apps:

iOSSearch - search the iTunes store for compatible apps.

Vintapps 3.1.3 - paid app.

Apple Club - filter apps by iOS version.

The 1G iPod can go as hih as iOS 3.1.3. To update:

The Settings>General>Software Update comes with iOS 5 and later.

Connect the iPod to your computer and update via iTunes as far as your iPod model allows

iOS: How to update your iPhone, iPad, or iPod touch

A 1G iPod can go to iOS 2.2 via iTunes and iOS 3.1.3 via

Purchasing iOS 3.1 Software Update for iPod touch (1st generation)       

https://buy.itunes.apple.com/WebObjects/MZFinance.woa/wa/touchLegacyLandingPage