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With Sn0wbreeze 1.7 you could easily execute tethered 4.0 jailbreak for iPhone 3GS with new bootrom and iPod touch 3 if you are on 3.1.2 or you have 3.1.2 SHSH blobs saved. TheRedsn0w tool 0.9.5 released recently was able to do a complete jailbreak with iphone 3GS 4.0 (old MC models) and iPod Touch 2G 4.0.

The Sn0wbreeze developer iH8sn0w has come up with a new update to Sn0wbreeze 1.7 to lets you to jailbreak iPod Touch 3G only if you have SHSH blobs saved for iPod Touch 3G 3.1.2.

Download Sn0wbreeze 1.7