When I first got my iPod Touch, it worked fine and everything. I had the version 2.0 or something (not so sure what version I used to have). I then decided to upgrade my iPod because I couldn’t download the apps that I had wanted.

My friend gave me the 3.0 OS upgrade for my iPod (It was a Firmwire? Whatever that is) and I was able to upgrade it successfully. I downloaded the apps I wanted and checked if all my other apps were working. All of them were running smoothly even Safari but when I went onto YouTube it said, “Cannot connect to YouTube.” I tried re-syncing it but it still didn’t work.

I didn’t jailbreak my iPod so yeah.
Have any of you had the same problem? Please Help

I'd connect it to iTunes and reset it. If it keeps happening, you can always go to the apple store.

How did your "friend" "give" you the 3.0 OS update?

Should just google it, http://forums.macrumors.com/showthread.php?t=723272 sounds like if you sync with the computer it should work again.

Oh, this is a normal problem for me o-o;
You can try two ways:
1. Resync your ipod
2. Try checking the date on it, sometimes my iPod changes back to a random date in 2000, so just change it back to today's date (something something 2009) and it should work