The iPhone Dev-Team has a Second Generation iPod Touch jailbreak on deck code named redsn0w. At first they only hinted at what redsn0w was all about, but the Dev-Team’s blog now has plenty of updates.

This is what we know, so far:

Update 1: Here is the first screenshot of a jailbroken iPod Touch 2G. Right now the jailbreak process is far too manual to be useful to most people. But this is a first step (well, second step if you include the initial exploit).

The Dev-Team says they regret committing themselves to a “formal ETA” when releasing yellowsn0w, and won’t be doing the same for redsn0w.

Update 2: A picture is worth a 1000 words but a video might be better in this day of Photoshop and fake YouTube videos. So we’re thinking of doing what we did before Christmas for yellowsn0w — show a demo of the jailbreak on Musclenerd’s Qik account (announced via his twitter account over there on the right hand side).

The Dev-Team has now released the video demo of the jailbreak, which can be found here.

Don’t believe anyone posing to be from the Dev-Team in the Qik chatroom, they’ve said on their website they won’t be participating this time around and “nobody on the Qik chat claiming to be us is actually us, so please don’t be fooled.”

Stay tuned for more updates on redsn0w.