In order to use the tuning feature on 2nd and 3rd generation iPod Touch, you must have an external microphone.
We recommend the following microphones for use with these devices.
SwitchEasy ThumbTacks
SwitchEasy's ThumbTacks are an ultra compact microphone for your iPod Touch, and look great too.
Apple Stereo Headset
If you happen to have one of these already (included with 3rd generation iPod Touch), or you'd like an all in one headset with microphone, the Apple Stereo Headset works great and you can use it for VOIP apps, listening to your iPod, and many other apps.