Ipod got stolen, how does Icloud tracking work?

Okay, so I recently got my Ipod stolen two days ago and I didn't even know I could track it till today. I went on my Icloud (I registered my Ipod with Icloud) and it says my device is offline. Can it still be tracked if they thief goes online? Is there any way to tell if they erased all the data on my Ipod and reset it? I desperately need my Ipod back, mostly because I write a lot and all my story idea's are in the notes. I had a friend send my Ipod a Kik message, but it said the user was offline and or dissconnected. I'm not sure if that means the thief managed to reset my Ipod. If they did, is it still possible to track them with the Icloud, like, if they go online can I track it?

Oh, and some Info about my Ipod: It has a passcode and it's one of the iOS 5's.