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there is a Youtube application pre-installed on the iPod touch. after it is turned on, the app will be on the home screen and looks like a TV
Go to Safari, type in youtube.com, click on Desktop on the bottom right (you may have to scroll down), then once the page loads click Create Account on the top right corner.
Go to YouTube in the Safari browser. Scroll to the bottom of the page. Click the Sign In link. Click the Sign Up/Create account link. Type in details.