Can ziphone permenantly damage an iPod touch?

No. It only affects software, and software can always be reinstalled.

I had a scary experience when my iPod pretty much died on me, but I restored it by plugging it into the computer, opening itunes, shutting off my iPod, and turning it back on, but holding down the home button as it turns on, it showed connect to iTunes, and I restored it using a downloaded firmware (1.1.4) by shift-clicking “Restore” selecting the firmware and iTunes restored my iPod the way it was. So be careful.