IPod touch 1st gen goes into recovery mode after shut down or lock

Alright, so I bought a used iPod touch 1st gen from a friend. It was working fine for a few weeks until it started shutting off and going into recovery mode when I locked or turned it off. When off, half of the times I can do a hard reatart and hold the home and hold buttonsand it will turn on. The other times it will just come up with a white screen. When I plug it into my computer, it says it has to be restored. And this is an ongoing loop that I cannot seem to fix. I looked up my serial number and it says it's out of warranty.
So my first question is, is there anyway I personally can fix this problem, or do I have to take it to Apple? My second question is, what are their policies on iPods that were bought used from someone else? And is there a way for me to get a warranty on it to get it repaired if I can't fix it myself or do I have to pay full price on replacement or repairs?

Welcome to Apple Discussions
Did you let iTunes restore it? Has the problem continued? The article below discusses how to put your iPod into a recovery mode so you can fix it.
http://support.apple.com/kb/HT1808
As to your warranty, you no longer have one. Apple will, for a fee, repair your iPod if it needs repairing. There are independent shops who can do it as well - just Google them.

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    Try Recovery Mode again. Timing is critical so it may not have been done correctly the first time. Detailed instructions at: http://support.apple.com/kb/HT1808.

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