I have a Mac so I'm not sure how to do it for PC...
For Mac, install the app and install the "server client" off of the website.
Once installed, it should appear in the top right of your screen in the same bar as your time, battery, spotlight, etc.
Click on it and select "server preferences". Once there, go to shared folders and click "add disk folder". This folder should contain all your videos.
The "conversion" tab is there if you want to convert your videos for whatever reason. You would click "convert" on your Touch or iPhone and the files would appear here.
For "settings" make sure you start at login and also set a password.
For "remote" this is where you get your specific address in which to access your library. Enable access from the internet and it will pop out a specific Server PIN. Put that in your device and voila, you are set!
The only thing is that your comp must be on and connected to the internet in order to have your iPod access it. You also need internet or 3g with your iPod. Also, your PIN resets if you turn off your comp so you just need to plug in a new one if you restart.
Hope that made sense. I have a test tomorrow and that was a nice study break
! Good luck!