My iPod Touch won't restore,what do I do?

try this and open iTunes on your computer. Unplug iPod if it's plugged in. Turn your iPod off (with sleep/wake and home button). Hold home button down and simultaneously plug in the iPod again. Keep holding it (home) until the screen is an apple with a USB Plug picture underneath it. Then in iTunes try to restore your Ipod.

You could also try this as suggested here

1: PLUG YOUR IPOD INTO YOUR COMPUTER!!!

2: HOLD THE "HOLD" AND THE "MENU" BUTTON UNTIL THE TOUCH'S SCREEN GOES BLACK AND SHOWS THE APPLE LOGO AGAIN THEN RELEASE THE BUTTONS!!!

3: WAIT ABOUT 5-15 MINUTES!!!

4: YOUR COMPUTER WILL MAKE A "CHIME" SOUND AND THEN THE IPOD WILL SHOW THE LOCKED SCREEN WITH THE BATTERY LOGO...

Then there is also a video on youtube

that will help with that. Only thing there is you have to have ifunbox available for download here

Last but not least you could try iReb from here and see if you can either kick it in or out of recovery mode.

Sounds confusing, but it really is not bad. Give it a try and keep a cool head, you'll get it. Good Luck and let us know how you are progressing.