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An IPSW is an iPhone/iPod Firmware Update file.
The files contain all data used by iTunes for software restoration of iPod Touch and iPhone firmwares and is also used for jailbreaking.
Users can find their IPSW for safe keeping at the following locations:
In Mac OSX: "~/Library/iTunes/iPhone Software Updates"
In XP: "\Documents and Settings\[username]\Application Data\Apple Computer\iTunes\iPhone Software Updates"
In Vista: "\Users\[username]\AppData\Roaming\Apple Computer\iTunes\iPhone Software Updates"
Jailbreak an iPod Touch with V3 software - In this guide you will learn how to use Redsn0w to jailbreak your iPod Touch with Apple 3.0 software.
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iTunes is a media player and organizer software for Windows platform from Apple that allows tight integration with the iPod players.