WARNING VM uses the hard disk as ram. So it repeatedly writes and reads of the hard disk. Since the iPod has flash memory usage of this tweak will lower your device lifespan to 5-7 years. So i recommend this tweak on a old device you want to speed UP!!!
If you want you can just get something like Supercharged, ImemoryEnhancer.
I used both of these and well i recommend Imemory Enhancer because Supercharged crashes ALOT more.
Go to cydia and go to manage ---> Sources ---> Edit ----> Add. And enter this http://repo.insanelyi.com
Go to search and search for Imemory Enhancer and when you find it press install and confirm.
Get sbsettings from the big boss repo. And then open it go to processes >> Free up memory. You should see a huge jump in the amount of free memory. If it crashes the first time its no big deal but if it crashes springboard alot then you should remove it.
I found a guide on how to do this manually but its a little more advanced but it is more stable and a little better. If your interested find it here.