Thank you Rupert Gee for the perfect 1.1.3 jailbreak!

Read this first to escape all errors!
Ok so if you're at 1.1.3 you will need the following to restore:
1. Download this package.
2. Follow the video below, and understand that sometimes things happen.
When ipodtouchmaster says close iTunes, it means quit every iTunes process (Ctrl+Alt+Del and the tab Process [includes iTunesHelper.exe and iPodService.exe])
A: If filecopytophone keeps erroring out as not recognized command, then exit iPhuc and open it again
B: Try entering commands a second time, it could be that your computer is slow in linux.
C: Remember to wait 5 minutes (not 3 or 4) until opening iTunes.

Now do this:


GETTING READY TO JAILBREAK TO 1.1.1

In iTunes, be sure to set it up as a new iPod (the other option to Restore from a backup will not work), and un-tick the option to automatically launch iTunes when you connect your iPod touch to your computer, and click “Sync” to finalize the options.

Launch your iPod touch’s Safari, and surf to http://jailbreakme.com/.

Scroll to the bottom of the page, and you’ll tap on the “Install AppSnapp” link. Your Safari will load the link, and suddenly freak out and your iPod touch returns to the Springboard. Done right, you will see a spinning wheel download progress indicator (it looks like this) while your iPod touch downloads and installs AppSnapp in the background. If you don’t see the indicator (within no more than 2 seconds after tapping the said link), re-apply this step until you do! Yes, keep on trying…, and trying…, and trying…. Depending on connection quality, sometimes it took me well over 4-5 tries before the indicator appeared! Some users report trying over days. That’s right, days! But of course, if conditions are right, you’ll get it on the first attempt. My best advise is to have a good internet connection, and perhaps try again at odd hours. Properly done, you’ll see in your Springboard a new icon named “Installer”. Your iPod touch has been jailbroken to version 1.1.1!

NOTE: Ignore AppSnapp's notification of applying OktoPrep, it actually doesn't!
JAILBREAK TO 1.1.2

1. The Installer App is now in the Springboard. Tap on it, and scroll to the “Tweaks (1.1.1)” category and installed “OktoPrep”. Quit Installer after installing it.
2. Go back to iTunes, then press and hold the Option key (SHIFT key for Windows) and click on the “Update” button (and not the Restore button you click on a short while ago!), then select the 2nd firmware file, iPod1,1_1.1.2_3B48b_Restore.ipsw, that you downloaded earlier in PART A.
3. Restoration begins and not surprsingly went through without a hitch too.
4. Next, go download the Jailbreak.zip from Conceited Software to the Desktop and unzip it. At this point, it’s critical to QUIT iTunes (and not just closing it) while keeping the iPod touch connected to the computer. I repeat, Quit iTunes but keep iPod touch connected. I repeat, Quit iTunes but keep iPod touch connected. Wake up the iPod touch if it has fallen asleep.
5. Look inside the 1.1.2-jailbreak folder, and double click on “jailbreak.jar” for Mac OS X (or “Windows.bat” if you’re on Windows).
6. Do not tick “Install SSH”, and leave the password as “alpine”.
7. Jailbreaking will take place right after you click on “Jailbreak”.
8. When it’s done, your iPod touch will reboot twice, or more. Do NOT touch it during this period. You’ll unlock it if about 2-3 minutes has passed and the iPod touch has fallen asleep.
9. Go to Settings -> General, and you’ll see it’s firmware 1.1.2… and the Installer app is in the Home screen.

JAILBREAK TO 1.1.3
As of today there are a number of methods to jailbreak to 1.1.3. In my opinion, the correct method is the Official Dev Team method.
Best of all, Conceited Software (maker of AppSnapp and OktoPrep you used earlier) has provided an installer Package to easily upgrade your 1.1.2 jailbroken iPod touch to version 1.1.3. It’s a long process, but there’s a nice GUI (Graphical User Interface) that tells you what’s going on.
Let’s do it.

1. Tap on Installer, and in the “System” category, select and install the “BSD Subsystem” package. (If you don’t see this package, then go to the “Sources” category, and install the “Community Sources” package. After refreshing your sources, the “BSD Subsystem” package will show up.)
2. After installing BSD Subsystem, it’s mission critical that you power-down and re-start your iPod touch.
3. Do it now (by pressing and holding the power button until the red-slider appear….)
4. You sure you have rebooted your iPod touch? OK, launch Installer and go to the “System” category and install the “Official 1.1.3 Upgrader” package. As of writing, it’s version 1.1.3-3. The “Contact” info is Conceited Software. It’s only 453.4 KB in size!
5. After installing the Upgrader pakage, you will find a new icon named Upgrade in your Springboard. Tap on it to start the upgrade process.

When the upgrade process is done, your iPod touch is jailbroken to 1.1.3! It’s a long, boring but thankfully, fully automated process. Go do something else while that’s going on. Just make sure the process isn’t interrupted by anything… such as a poor Wifi connection, low battery… whatever.
NOTE: If you find you're iPod in it's iTunes connection icon, just connect it to iTunes and set up as a new iPod. Don't panic, you should remember it was because you made a system restore at the beginning of the upgrade.

INSTALLING THE JANUARY SOFTWARE UPGRADE
Guess what, it’s been a while but we’re finally ready to wiggle!

1. Launch Installer and add the following new source: http://madpike05.googlepages.com/repo.xml
2. At first the source will display as untilted. Ignore it and close installer. Open it again.
3. Refresh your Installer after that.
4. Go to the “iPhone 1.1.3 Applications” category, and install “The iPhone 1.1.3 Apps” package.
5. After installation and unlocking your iPod touch, you’ll be greeted by this pop-up window indicating your iPod touch’s icon can wiggle.
6. You really own a jailbroken 1.1.3 iPod touch.