When you are at the main iPod Touch desktop screen find and select Settings. Once you are in the iPod Touch Settings go to the bottom of the second section and find Safari, which will be right under Mail, Contacts, and Calendars. It is in here you will be able to change the iPod Touch's Safari Settings.
At the top you can set what Search Engine you want to have as default in the upper right hand corner search prompt in Safari. It is originally set as Google, but you can reset it as Yahoo as well. Below the General Safari Settings you will find the Security Settings. Here you have the ability to turn Java, Plug Ins, and the automatic Block Pop-Ups feature on or off. It is a good idea to keep all of these things in the On position, especially the Block Pop-Ups.
At the bottom of the Security Settings will be the details for Accept Cookies, which you can set to a specific regiment. You are normally set to accept cookies from sites you have visited. This is the middle ground between the other Safari cookies settings of Always and Never. This is a good position, but if you like the ease of use and only go to a few different websites on your iPod Touch's Safari then you can select Always.
Below the Security settings you will find buttons for Clear History, Clear Cookies, and Clear Cache. Again, unless there is a clear reason to do this then you should avoid it. Clear History is good if you want to cover your tracks from outsiders who may check your iPod Touch to see what web activity you have had. Clear Cookies and Clear Cache are good if you are concerned about security or clutter.
At the very bottom will be a Developer option, and when you select it you will be given a Debug Console option that you can turn on or off. This is intended to solve web page errors, but really just causes problems by bringing up the console every time. It is best to keep this in the Off position.