The iPhone Dev-Team has posted a new video that demonstrates the use of a dongle to boot a second generation iPod touch that was jailbroken.
The dongle is required to boot your iPod Touch when it isn't tethered to your computer. Otherwise, the current jailbreak requires that you tether the iPod touch to a computer. The dongle makes the solution portable for use while away from your computer.
This interesting and complicated development for hacking and jailbreaking the iPod touch might be an example of things to come as Apple persists in his view of jailbreaking as illegal.