How do you reset a forgotten ipod touch passcode?

Plug in your iPod

Go to "My Computer"

Go to your iPod's drive (F for me)

Make sure you can see all hidden folders (If you aren't sure go to Tools, Folder Options, View Tab, and check Show)

After that click iPod_Control

Click the folder called "Device"

And then change it from _locked, to _unlocked :D

Hope this helped