iRecorder works great with iPod touch, but requires an external mic to capture sound on older generation iPods. iPod Touch G1 and G2 does not have a built in microphone. When trying to use iRecorder with these devices you must use an external microphone.
There are many external headset / microphones available for iPod, but the most commonly used headset with microphone is Apple's standard earbuds that are supplied with iPhones.
If you attempt to record with iRecorder without an external mic on a device with no built in microphone, iRecorder will not be able to capture sound, and will create an empty file. This file will not be able to play back with iRecorder.