Yeah it does .
When you restore an iPod it will wipe all data saved on it. Yeah
You cannot get all apps for free without jailbreaking an iPod Touch. It is not possible.
No.
jailbreaking the ipod touch is legal. But if you use the tool that gives you all apps free it is illegal.
To erase pics from an iPod touch all you have to do I'd erase them from the directory on the computer from which you uploaded them to your iPod and they will be erased from the iPod at next sync.
All purchased music can be accessed and redownloaded both from your PC or Mac using iTunes, or by using the iTunes App on your iDevice.
No. If you are concerned about jailbreaking, you can always restore the firmware (this will erase all jailbroken apps, but you will still have your iPod). The only real risk is if you were messing around manually in the filesystem, and even then you should be able to reach DFU mode (Google it)
Resetting the iPod will erase all of the songs, so remember to back it up!
All AppsMoviesSongsModificationsDownload YouTube Videos
If you jailbreak correctly, no, you keep all your songs on your ipod after jailbreaking.
Nothing. All it does it trash your iPod/iPhone and do you know what happened to mine... It stopped my iPod completely.
Pretty much all jailbreaking your iPod touch does is give you the installer app... Which I highly recamend you do but make sure you do the write jailbreak program or it will delete all your apps music and videos and pictures