I need help on how to fix my iPod Touch (water damage)?

Good move on submerging it in rice. So your iPod doesn't sense you touching it? Unfortunately there's not much you can do. Have you connected it to iTunes and tried it then? Try rebooting it. Hold the sleep button and the home button until the screen shuts off. Keep holding until you see the Apple logo reappear, then let go. If that doesn't work go on the Apple website and try talking to one of the customer service people on chat. Don't tell them about the water damage though, just say it doesn't respond, maybe they have some tips.

You need to try Silica Gel Packets. There was a good article on associatedcontent.com that explains how to dry an iPod, MP3 player, cell phones, or any electronics. You need to place your iPod in a zip lock bag with Silica Gel Packets. Silica Gel will remove all the moisture from the phone and its components, something air drying will not do! Just Google "Silica Gel Packets" and you will find several companies selling these products. There is also a web site called: http://www.SilicaGelPackets.com that has them.