Its a last resort, but this is what usually happens when people are in your situation.
Go to settings.
Go to General.
Scroll to the bottom and click on Reset.
Click on Reset All Settings.
Then Click on Reset All Settings. You will have to do this twice.
This will reset the iPod Touch to the original factory settings so you
will lose some saved information like wifi settings and stuff, but you
will keep any apps you have downloaded as well as contacts etc.
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Make sure you are connected to the internet. Go to Settings>General>Network>Enable Cellular data (for iPhone) For iPod Touch, make sure you are connected to an operational WiFi network. You can do this by just going to the Safari application for example and doing a google search to check and see if you have a usable connection. If these do not work, quit the running apps by double clicking the home button then holding down an icon at the bottom of the screen then exiting out of the apps one by one. If this does not work, restart your iPhone or iPod Touch (it is okay to restart because the jailbreak on iOS 4.2.1 is untethered, meaning you can turn off your device without having to re-jailbreak) Try to open youtube when the device turns back on. If this does not work, go to Safari and search "youtube mobile" and click on the first link. This will direct you to the browser version of YouTube. Once on that page, tap the + button at the bottom to add this page/link to your home screen. It will function like the regular YouTube app, and in my opinion, its faster.
Step 1: Find out which is YOUR WiFi network. People who live in cities and such can pick up their neighbor's WiFi connection. Make sure you pick your own by going to your computer, and click on the internet icon on your taskbar (where they show the time). This will show your network's name. Go to your iPod and choose it.
Step 2: If your network has no lock symbol next to it, wait for a few minutes and a check will show next to your network once it is connected - you should be able to go on the web now. If your network has a lock symbol on it, tap it and enter the correct password. Once the correct password is entered, wait for a minute and your iPod should be connected to the network - you should then be able to go on the web.
Hey, i had the same problem. I you already have a wifi connection and it still says, "Safari is not connected to internet" Goto settings. Click the blue arrow next to the wifi name, scroll all the way down and click renew lease. It should probably get the IP address right and you'll be good.
The youtube app on the phone is provided by the network (original provider of the phone) so unless t-mobile provide that (and other services) you can't use it... but you can connect to the normal youtube by using safari it just wont be optimised for the iphone like the app is