No, use redsn0w.
You do not Jailbreak iTunes; you jailbreak iPods and iPhones.
No you can download apps without jailbreak, but you will be able to download apps that have been disapproved by apple if you have jailbreak.
You can without but the easiest generally do use iTunes.
Not At All...... But updating your ipod will remove the jailbreak
Yes.
No
No
that's right
i believe it is because your ipod has been bricked. This happens when you jailbreak with itunes running. To fix this restore and then re- jailbreak with itunes closed. Have anymore jailbreak questions email me @ arobinson410@gmail.com
No, most jailbreak tools are free, however most good apps even on jailbreak app sites cost money. You can't use iTunes gift cards on these, but you can on the app store.
to do that you need to jailbreak your iPod... and i wont recommend that as that will expose your device to viruses and stuff
No you will need to restore your Apple device.