Ipod touch 16gb, passcode forgotten screen reads disabled.

When your iPod Touch displays a message telling you to connect it to iTunes, it may be in recovery mode, or have been disconnected in the middle of an update.
To get rid of the screen, you must reset your device. If in passcode mode, an iPod Touch must be manually unlocked or fully restored to get back to the home screen.Forcing a Reboot
When your iPod Touch is stuck on a screen that is instructing you to connect with iTunes, a normal restart will probably not work, as the hard drive has become frozen.
You can still, however force the iPod to reboot using a process called resetting.
To reset an iPod Touch, hold down the "Sleep/Wake" and "Home" buttons at the same time until an Apple logo appears, indicating that the device is rebooting.
When an iPod Touch reboots, it always goes back to the lock screen. Passcode mode will still be enabled.

Unlocking With the Passcode
If you know the passcode for your iPod Touch, slide the "Slide to Unlock" arrow and then enter your code on the next screen.
Upon entering your password, you will be directed to the device's home screen. If you enter the wrong password too many times, it will become disabled temporarily.
The iPod Touch can also be set to erase all content after 10 incorrect passcode attempts if you previously enabled this feature, don't attempt more than 9 entries.


Unlocking Without Passcode If you have forgotten the passcode to your iPod Touch, the only way to unlock the device is by restoring it.
Restoring an iPod Touch returns it to the factory settings, meaning that any settings, applications or music you added to the iPod are removed.
Once the device is restored, you can re-add your downloads and other information using the backup copies in your computer iTunes program.
The passcode setting will be disabled unless you manually enable it again.

Consideration

If you don't have a backup of your music and applications in iTunes on your computer, you can also download another copy from the iTunes Store or App Store on your device after a restore.
Any photos that are deleted during restore, however, will be lost forever if a backup does not exist.
Always back up your information via sync on a regular basis to avoid this problem.

If you own an iPod touch, you have the option to set a password, which Apple calls a passcode, to protect your data.
Anyone who attempts to access your iPod, after unlocking it or turning it on, will require the passcode to do so.
However, if you forget your passcode or incorrectly enter it, you will eventually see an alert that your iPod touch has become disabled.
To unlock your iPod touch after forgetting the passcode, and still access your content, you must connect it to the computer with which you last synced it.

Connect your iPod touch to the computer with which you last synced the music player.
Launch iTunes if it does not automatically open.
Select your iPod touch under the devices list, and click the "Summary" tab in iTunes.
Click "Restore" and, when prompted, click the "Back Up" button to save a back up of your iPod touch in iTunes.

Click "Restore" when prompted, after the back up saves. After restoring, click "Ok."
Choose the most recent back up from the drop down list on the "Set Up Your iPod" screen.

Click the "Continue" button to restore your iPod touch.

iOS: Forgotten passcode or device disabled after entering wrong passcode
http://support.apple.com/kb/ht1212
iTunes: Restoring iOS software
http://support.apple.com/kb/HT1414

If you own an iPod touch, you have the option to set a password, which Apple calls a passcode, to protect your data. Anyone who attempts to access your iPod, after unlocking it or turning it on, will require the passcode to do so. However, if you forget your passcode or incorrectly enter it, you will eventually see an alert that your iPod touch has become disabled. To unlock your iPod touch after forgetting the passcode, and still access your content, you must connect it to the computer with which you last synced it.

Connect your iPod touch to the computer with which you last synced the music player. Launch iTunes if it does not automatically open. Select your iPod touch under the devices list, and click the "Summary" tab in iTunes. Click "Restore" and, when prompted, click the "Back Up" button to save a back up of your iPod touch in iTunes. Click "Restore" when prompted, after the back up saves. After restoring, click "Ok." Choose the most recent back up from the drop down list on the "Set Up Your iPod" screen. Click the "Continue" button to restore your iPod touch.

iOS: Forgotten passcode or device disabled after entering wrong passcode
http://support.apple.com/kb/ht1212 iTunes: Restoring iOS software http://support.apple.com/kb/HT1414

Step 1:
The iPod Touch is a type of iPod that features a touch screen and can function as both a portable media player and as a pocket computer. It is possible to password protect your iPod Touch so that you will have to enter a password every time you want to unlock the iPod Touch screen. If you repeatedly enter the incorrect passcode, your iPod Touch will become disabled. To unlock a disabled iPod Touch, you need to sync your iPod Touch device with iTunes on your computer.

Attach the iPod Touch data cable to the bottom of your iPod Touch device and attach the other end of the data cable to an available USB port on your computer. Open iTunes on your computer and then select your iPod Touch device from the list of available devices on the left side of the iTouch window. Click the "Restore" button. If you have previously backed up your iPod Touch, you can choose to restore the device to the last back up or any saved backup. If you have never backed up your iPod Touch, this process will restore your iPod Touch's factory settings. Wait while iTunes syncs with your iPod Touch and restores the device. iTunes will prompt you when this process is complete.

For unlock instructions, click on the Apple help site:
Forgot passcode for your iPhone iPad or iPod touch or your device is...

Take to apple shop or go to iTunes on pc

WARNING: DISABLING AN IPOD TOUCH WILL MAKE IT UNUSABLE UNLESS YOU PLUG IT BACK INTO ITUNES AND RESTORE IT.
If you want to know how to disable an iPod touch:

1. Go to Settings> General > Passcode Lock >Turn Passcode Lock On > type in a passcode
2. Now, hit the button at the top of your iPod.
3. Try logging in with the WRONG passcode many times. This will disable the iPod touch.

Do I read your question correctly: you want to disable your iPod?
Or do you want to recover it from being disabled?
For the first one, to disable your iPod:

1. Turn ON the passcode-lock by going to Settings> General> Passcode Lock> ... and then, tap Turn Passcode On.
2. Now, to disable it, put your iPod to sleep by pressing the POWER button once. Then wak it up. You will be asked for the passcode before you can use it.
3. Enter an incorrect passcode several times to disable the device.

Now, if what you want is to recover your device from being disabled, all you need to do is read this tip:
http://www.fixya.com/support/r5541493-put_iphone_ipod_touch_dfu_mode_restore


For more iPhone / iPod touch tips like jailbreaking and unlocking, click here.

If you need online help about jailbreaking and unlocking, you can contact me personally at this email: [email protected]


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restore it to factory settings using itunes

PLUG IT INTO THE COMPUTER AND RESTORE FACTORY SETTINGS