Can't set passcode?

[TitusCicero]

For some reason my iPod touch won't allow me to set the passcode. I goto settings->General->Passcode Lock and then it asks me for the passcode twice and then I touch "turn passcode off" (which I assume should turn it on) and then it asks me for the passcode which I enter and then it goes back to the General main menu which then says that the passcode is still off? I have tried different codes. I have tried setting the time limits to different times.

Any idea's why or how I can set my passcode?

Thanks

iPod Touch 32gb Version:1.1.5(4B1) Model: MB376LL