Upgrading software from 2.2  on a 2nd generation ipod touch

I have a 2nd generation IPOD touch and its saying its upgraded to the correct software which is 2.2, but I know it can upgrade to 4.0. There are some apps I want to use on it, but cant because the software is not upgraded high enough. Any advice on how I can get it upgraded to the latest software that it can take?  I tried to restore it, but that did not work.
Thanks

It is easy to tell a 1G form a 2G from the shape of the antenea cover, the black plastic in the upper left of the back of the iPod.
A 1G can go to iOS 3.1.3 that you get here
Purchasing iOS 3.1 Software Update for iPod touch (1st generation)
iPod touch (2nd generation)
iPod touch (2nd generation) features a 3.5-inch (diagonal) widescreen multi-touch display and 8 GB, 16 GB, or 32 GB flash drive. You can browse the web with Safari and watch YouTube videos with Wi-Fi. You can also search, preview, and buy songs from the iTunes Wi-Fi Music Store on iPod touch.
The iPod touch (2nd generation) can be distinguished from previous iPod touch models by its contoured design and oval shaped antennae cover in the back upper left corner.
iPod touch
iPod touch features a 3.5-inch (diagonal) widescreen multi-touch display and 8 GB, 16 GB, or 32 GB flash drive. You can browse the web with Safari and watch YouTube videos on the first-ever Wi-Fi iPod. You can also search, preview, and buy songs from the iTunes Wi-Fi Music Store on iPod touch.

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