Things You'll Need
Instructions
Jailbreak your iPod Touch. This can be performed using several available online tools. Three of the most popular are RedSn0w, PwnageTool and Jailbreakme. Depending on which generation Touch you own and the version of iOS you have installed, different software versions may be required. The simplest method is to use your iPod Touch's browser over a Wi-Fi connection and browse to Jailbreakme. The website will provide an automatic jailbreak for many devices.
Connect your iPod Touch to your PC using the iPod to PC Connector Cable. If iTunes launches automatically, close the program.
Install the scph1001.bin BIOS file on your iPod Touch. There are several applications that allow you to browse and control the contents of your iPod, including XPlay, iPhoneBrowser, and DiskAid. Using these applications, place the BIOS in the "/var/Mobile/Media/ROMs/PSX" directory.
Launch the Cydia application on your iPod Touch. If you jailbroke your device with an application such as greenpois0n, you may need to launch the Launcher application first, which will install Cydia. When Cydia asks you to identify yourself, touch "Hacker."
Touch the "Search" button on the bottom and enter "psx" in the search field. Then touch "Search." Select "psx4all" and follow the instructions to install.