Q: my ipod does not have a software update bit in the general area how do i update it now?

http://support.apple.com/kb/ht4623

2. Ensure that you're using the latest version of iTunes.
3. Connect your device to your computer using the included USB cable.
4. After iTunes opens, select your device when it appears in iTunes under Devices.
5. Click "Check for Update" in the Summary pane to check for available updates.
   
6. If an update is available, iTunes prompts you to download and install the update. Do not disconnect your device until the update has finished.
   

Note: To update your iOS device, iTunes needs to stay connected to the Internet. If your computer uses your iPhone's Personal Hotspot for its Internet connection, you'll need to update your device wirelessly or connect your computer to another network.

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

- A 2G to 4.2.1. Requires iTunes version 1o or higher. If a Mac it requires OSX 10.5.8 or later.

- A 3G to 5.1.1  Requires iTunes version 10.5 or later

- A 4G to 6.1.3  Requires iTunes version 10.7 or later. For a Mac, that requires a Mac with OSX 10.6.8 or later

Identifying iPod models