Thank you all for the replies. I believe the problem really is the sd card, as I've reset this thing more times than I can remember, and the same thing happened over and over again, it kept freezing after a few minutes. Today I managed to install android on it using a different sdcard, since I still didnt have a factory image to try on it, and the Touch is flying, didnt freeze once.
I've been reading through this thread but I'm still unsure on how to do the serial number procedure. If somebody can give me directions to it I woud be really greatful.
Cheers
l