I've read that the iPod doesn't work with the DHCP settings in ICS Control. BUT...
For complete details on how to set this all up (of course you'll have to slightly modify for the ipod touch since I referred to a laptop) check out the post I made in the upgrades forum. Worked for one other person so far. Let us know if this works for the iPod as well.
Here's the link to the upgrade forum post started by ?GotJazz?...
http://forum.ppcgeeks.com/showthread.php?t=27410