The iPod touch jailbreak effort continues to grind forward in slow steady steps. "Martyn", hardware expert and hacker extraordinaire, posted on Craig's List until he found a lady whose iPod touch screen had been smashed. Since the unit was not covered under Apple Care, said lady swapped the dead touch for a nice pretty iPod nano. He took the smashed touch back to his lair and extracted its chips. At this time, Martyn is dumping data from those NAND chips and expects to finish recovering that data by tomorrow morning.
It will take some time after dumping the raw data to make sense of that information. Don't expect me to be able to test out the iPod touch applications on the iPhone for some time to come. It is still unclear whether the data is encrypted or not and whether Martyn and his peers will be able to reconstruct the complete file system. Visit the touchdev wiki for more details as they develop.