Yes, Virginia, The iPod Touch 2G DOES Have Bluetooth

For nearly two years, rumors have swirled that the iPod Touch 2G had Bluetooth functionality buried in it, and all it would take would be the kiss from a handsome prince…er, the right hardware/software hack — to awaken it.

Your prince has come.

In yet another tidbit to emerge from the iPhone OS 3.0 unveiling, Apple's Greg Joswiak said that Bluetooth can be "unlocked" on the iPod, for the less-than-princely fee of US$9.95.  This should open up a whole new yield of hardware support, including wireless accessory control and peer-to-peer connections.