Err, you'll have to update eventually if you want to fully make use of the future apps and updates coming out. Plus, while the new features aren't exactly mind-blowing (besides Peer to Peer, bluetooth, and push notifications in my opinion) it's still good to have them. Why not update now so that when the JB comes around, you don't have to do both at once?
Updating my 1st gen. iPod Touch took 21 minutes. 10 minutes to download the firmware and 11 minutes to prepare, install, verify, etc.
I have a question about the new software update. If you update, will you lose your game data (saves, statistics, etc)? Edit: Thanks, spmwinkel
You should connect your device to iTunes, sync so that it will backup, and then update. That way you should keep all data (save games, downloaded e-mails, photo's, etc.).
I updated an iTouch 2g and is all ok, I have all data(saves, photos, configuration...) I had never JB