everything on it is free
as long as it's still under warranty and never been jail broken (Apple can run a diagnostics test on your iTouch to see if it's ever been jail broken) you are fine
go on blackra1n.com
by jail breaking it
Yes, Jail-Breaking is completely illegal, also it can rapidly reduce the speed of your iTouch or phone and ultimately it will void your warranty :)
Go on apps like games, aim etc.
its not 100% safe and still has a chance of breaking. Remember if you do jailbreak you itouch and it breaks your warrantee will cancel out and you wont be able to buy i new one unless you buy a new one. And you can jailbreak your itouch from either jailbreakme.com on your itouch or ziphone.org on your PC
if you want your iPod touch jail broken you could go to a computer store and ask them to get it jail broken
Impossible
Yes, but you can only get it on a jail broken software. I work for Apple and believe it or not, I KNOW about jail broken softwares. YES, it is illegal. NO, you cannot get ClubPenguin without a jail broken software without getting arrested
yes jailbreaking your Iphone/Itouch will not ever break the devices. the only difference with jailbroken iphone is that you have access to "Cydia" which is an app store made for apps that are not allowed on the Apple App store. I highley suggest using GreenP0isen.
Wish you hadn't jail-broken your iPhone
Most likely, that's why I never jail broke my iPod Touch due to the many risks.