Yeah I know I covered it in the article "New Official Software Applications Available for iPod Touch", but it took me two days to figure out how to actually buy and install it. I had to hang around the official iPod Support forums until I found the answer.
So, BEFORE you buy and instal the new iPod Touch software you have to upgrade your copy of iTunes and install the new firmware version (1.1.3) on your iPod Touch.
How to Upgrade iTunes (to Version 18.104.22.168)
For some reason my copy of iTunes, which normally automatically detects new versions of iTunes, didn’t pick this one up. I had to do it manually.
Start iTunes. Select the ‘Help’ menu across the top, then select ‘Check for Updates’. This will tell you that there is a new version available. Follow the on-screen instructions to update your version of iTunes. You’ll need to restart your computer once it’s done with the upgrade.
How to Install the Firmware (to Version 1.1.3)
Start iTunes and connect your iPod Touch to the computer. Select your iPod Touch from the list of devices and then select ‘Check for Update’. Install the update as promted and you’ll be all set. You’re now ready to buy and install the new software package for the iPod Touch.
How to Buy and Install the iPod Touch Software
In iTunes, select ‘iTunes Store’ the left hand menu. On the iTunes Store main page you’ll see a link to the ‘January Software Package’ for the iPod Touch. Select it and follow the instructions to comeplet the purchase. This is much like buying a song. You’ll be prompted to right click your device in the left hand manu. Select ‘sync’. All done after a minute. Have fun!