Apple iPod touch iOS 3.0 - Manual (Page 106)

Timer
Set the timer: Tap Timer, then flick to set the number of hours and minutes. Tap Start
to start the timer.
Choose the sound: Tap When Timer Ends.
Set a sleep timer: Set the timer, then tap When Timer Ends and choose Sleep iPod.
When you set a sleep timer, iPod touch stops playing music or video when the
timer ends.
If you start the timer and go to another iPod touch application, the timer continues
running in the background.
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