Bought an iPod Touch 8GB MC086ZP for A$259. It has the latest version 3.1.2 (7D11).
You can't check at the store whether your device is working properly until you connect to a Windows PC or Mac with iTunes installed. There is no need for internet connection and after synchronizing, you'll be shown the main menu.
Power On - Press & hold the Sleep/Wake button until Apple logo appears.
Power Off - Press & hold the Sleep/Wake button until "slide to power off" appears and then drag the red slider.
Check Songs, Videos, Photos, Capacity, Available, Version, Serial Number, Model, Wi-Fi Address & Bluetooth - Select Settings > General > About
Set Passcode Lock - Select Settings > General > Passcode Lock > Turn Passcode On
Customize Home Screen - Touch & hold any icon on the home screen until the icons start to wiggle. You can move icons anywhere even to a different home screen.