[cpjr]

1. Open Itunes.

2. Plug your Touch into the computer.

3. Manually place into DFU mode like this (while Itunes running and plugged in):

1. Hold power button down 5 seconds exactly.
2. WITHOUT LETTING GO OF POWER BUTTON, hold down the home button (now you have both held down) for 10 seconds.
3. Let go of power button, KEEP HOLDING THE HOME BUTTON for around 30 seconds

Itunes should now recognize the Touch if done properly and let you restore.

PS - Load the firmware onto your computer - dont ever use from a portable drive.