downgrade to 1.1.1
I had this same question when I first got my 1.1.2. If you downgrade to the 1.1.1 you can jailbrake and then upgrade back to 1.1.2 and your in business. You can have all your $20 upgrades + and it won't cost a cent. I've been using them for about 2 months now and have had no problem. There are certain programs that won't work on 1.1.2 but the majority will and you will just have to un-install the ones that don't.
To do the jailbreak - do a youtube.com search for "ipod touch jailbreak" and find a video by a guy named "***************". He has a great video showing exactly how to do the jailbreak AND will give you the link to find the 1.1.1 downgrade program. He will walk you through the whole thing.
It sounds a little scary, but really it's pretty easy and believe me you won't regret it afterword. Remember, if all else fails, you can always do a total reset on itunes and get right back to square 1. But I don't think you'll have to.
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