There's an easier way to enter recovery without worrying about the timing - saw this over on iPod Touch Fans.
Make sure your iPod Touch is completely turned off and unconnected from your computer. Hold down the Home button, and connect it to your USB cable. It will automatically turn on when you connect the cable. Just keep holding the Home button until the Connect to iTunes logo appears. That's it...
Found on a Firewire cable - If you need to detain a burglar until the authorities arrive, this FireWire cable can render approximately three perpetrators immobile when properly hog-tied.