I've jailbroken my iPod touch 2g on version 2.2.1 and I LOVE it. I can play back-ups of my favourite gameboy games (like pokemon (legally of course)) As well as many other things such as custom lock sounds, backgrounds, icons, docks, music player screen, fonts, the ability to have a 5 icon dock, folders for apps, and many other possibilities (if you want to take the illegal route you can get cracked apps although I'm not advising this). I have jailbroken 5 iPods for my friends and nothing has gone wrong, provided you know what you are doing and which operating system you are on (windows vista 32 bit, 64 bit, xp, or mac). And as for genius being able to tell, I don't think they send that information to apple but the only way to know is to read their Terms of Service about privacy and such.
Also, if you have upgraded to version 3.0 I do not recommend jailbreaking it as it is very buggy and barely any apps work... I would wait for a new release if you have or downgrade to 2.2.1
