If jailbroken ipod touch dies will it never work again?

You just restore it and any trace of the jailbreak is gone. If things are really bad you just drop it into DFU mode to restore.

Correct; a restore erases all sins except hardware faults, which jailbreaking can’t cause.

As for the claim that jailbreaking will kill your iPod, bad software will kill any electronic device, but there are enough good jailbreaking programs out there that its not as big a risk as some make it out to be. And again, if you get a bad jailbreak, just restore it to factory default and try again with a different program.