how do i format my ipod touch ,and does it go back to new

Locked Out, Forgot Lock or Restrictions Passcode, or Need to Restore Your Device: Several Alternative Solutions

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Forgotten Restrictions Passcode Help

iPad,iPod,iPod Touch Recovery Mode

You will need to restore your device as New to remove a Restrictions passcode. Go through the normal process to restore your device, but when you see the options to restore as New or from a backup, be sure to choose New.

You can restore from a backup if you have one from BEFORE you set the restrictions passcode.

Also, see iTunes- Restoring iOS software.

To format your iPod Touch, you first go on your iPod Touch and go into Settings. Go into General and find Reset. It gives you options on what you want to reset. And no, syncing does not format your iPod Touch. If you reset your iPod, everything listed in the option will tell you what will be lost. Depending on what option you choose, it will make everything there new. Hope this helped!