Q: upgrade software on ipod touch

Depends on which generation of iPod you have ?Some can't be upgraded

To check , go to settings ,General ,update software

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 10 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 6.1.5  Requires iTunes version 10.7 or later. For a Mac, that requires a Mac with OSX 10.6.8 or later

- A 5G to iOS 7. Requires iTunes 11.1 or later if you update via iTunes

Identifying iPod models

If you have iOS 4.2.1 or later on the the iPod and there was version compatible with that version, then you should be able to get a compatible version by:

App Store: Downloading Older Versions of Apps on iOS - Apple Club