Check this out:

http://www.crunchgear.com/2009/02/17/defcon-badge-jailbreaks-the-ipod-touch/

From the article:
MuscleNerd has posted a video showing how he jailbroke the iPod touch simply by connecting a microcontroller - in this case a DefCon badge with some crazy chips in it - and sending eight characters to the iPod Touch during boot, thereby allowing the new firmware to be uploaded.