What does jailbrake do to the iPod?

Jailbreaking your iPod allows it to run different types of code. After jailbreaking your iPod, you will be presented with an app called Cydia/Installer. Cydia/Installer allows you to install third-party apps.

One user said:

"Jailbreaking is risk free and cannot void your warranty. You can simply restore in iTunes at anytime to get back to a factory state."
jail breaking and ipod touch or iphone is basically adding awesome apps that app inc. does not allow. You also have the ability to customize your device.

if you dont know what this is its a thing that hackers made and they put it on ipod touch and iphone and 1st generation ipod nano this is very bad to use because its hacked so.... yea its breaking ipod rules to and once you jailbreak it ive heard its freedom for ipod touch and iphone viruses yea so if u really want to get it i suggest you dont

^^^That was seriously painful to read. and you need to be a bit more specific with your question.
Jailbreaking (or hacking) an iPod deletes Apple's software off the iPod and installs a programmer's code that allows the user to install virtually ANY app on the device. However, while Jailbreaking is NOT illegal, it does void your warranty.