Using a used iPod touch

I have an iPod Touch (8GB), that I got from my niece (my daughter cracked the screen on hers so I had to buy her a new on, I kept the cracked one). Do I need to erase all the settings and content to set it up for myself? or can I just changed the itunes account and email address?

You can plug it in and restore it or you can do an erase all settings and content.
http://manuals.info.apple.com/enUS/iPod_touch_3.1_UserGuide.pdf

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