App upgrade to iPod 2.0 not free

Apple is really is trying to make money off this App store business. They are charging iPod users an additional 9.95 for the software update in order to use applications from the app store. When I purchased my iPod Touch 32GB, it was w/software updates. I plan on to sell my iPod Touch. Best way to get free software and not pay a dime, Jailbreak. Not sure how it works for the iPhone.