Here are the instructions on how to Jailbreak iPod touch 4G using PwnageTool for Mac on iOS 4.3.2
You need to make a folder called Pwnage on the desktop.
You will also need the 4.3.2 iPod Touch firmware ?4.3.2 (4G):
When downloading the IPSW file, it is best to download it with Firefox since Safari often auto extracts it!
Double click to mount PwnageTool then drag the PwnageTool icon into the Pwnage folder.
From the Pwnage folder double click to launch the PwnageTool application.
Click to select the expert mode from the top menu bar.
Click to select your iPod touch and check-mark will appear over the image of the phone. Click the blue arrow button to continue.
Now you will be brought to the “Browse for IPSW” page. Click the Browse for IPSW… button.
From the popup window select your firmware from the Pwnage folder then click the Open button.
Click to select General then click the blue arrow button.
The General settings allows you to decide the partition size.
The Cydia settings menu allows you to create custom packages so you do not have to manually install the necessary them later.
Click to select the Download packages tab. Then click the Refresh button to display all the available packages. Double clicking the package you want will download it and make it available in the Select Packages tab
Checkmark the ones you want then Click the blue arrow button.
The Custom Packages Settings menu displays listed package settings for your custom IPSW. For know leave these settings as is. Click the blue arrow button to continue.
You are now ready to begin the pwnage process! Click the Build button to select it then click the Blue arrow button to begin.
You will be asked to save your custom .ipsw file. Save it to your Pwnage folder you created on your Desktop
Your IPSW is now being built. Please allow up to 10 minutes.
You will be asked to enter your administrator password. Do this then click the OK button
Once your ipsw has been built you will be asked to connect your iPod to the computer. Once it detects your device PwnageTool will guide your through the steps to putting your iPod into DFU mode.
Press and hold the power and home buttons for 10 seconds.
Then release the power button and continue holding the home button for 10 seconds.
Once your iPhone is successfully in DFU mode, PwnageTool will prompt you to launch iTunes.
Once In iTunes, hold the Alt/Option key and click Restore.
Navigate to the Pwnage folder on your desktop using the dialog window that appears. Select the custom IPSW that was created and click the Choose button.
iTunes will now restore the firmware on your iPod. This can also take up to 10 minutes. Once done you will be rebooted into jailbroken iPod OS 4.3.2!
[ Image courtesy iphone4jailbreak ]