I've been planning to make a cover for my iTouch for some time. And finally I got the time to do so. This cover is made using tan leather and synthetic felt. The thickness of leather is around 3mm and that of felt is around 1.5mm.

Materials needed for project:

Leather
Synthetic felt (If you don't have then also it'll work)
Wooden Mallet/Hammer
Waxed Thread (If you don't get, then use a candle to coat the thread)
Two Needles
Cutter/Exacto Knife
6 Prong Chisel Leather Craft Tools (You can use needle also to make holes)
Clamps
Rubber adhesive
2 MDF or any flat wood pieces

Download and print out the templates. This was made in Adobe Illustrator. Cut out the piece of felt to the dimension in the template. Just to be on the safer side cut 5mm extra on each side. You can anyways remove the excess if you want to.

iTouch Cover Template.ai
Download

Step 1: Cutting Felt and Gluing It to Leather

Cut the piece of felt in the size given in the template.

Apply a thin layer of rubber adhesive on felt and the inner surface of leather. Do not Bond Immediately, wait for 2-3 minutes before sticking. Leave it aside for 15-20 minutes.

Note: Just to be on the safer side cut 5mm extra on each side. You can anyways remove the excess if you want to.

Step 2: Cuting Leather and Clamping It

As the piece of felt has already been cut to size, using the boundary of felt as reference cut the leather using a cutter and a scale.
I didn't cut leather initially because sometimes while folding the leather edges become shorter and don't match with felt edges.

Fold the cut piece along the middle line and keep it pressed using clamps and two flat pieces of wood. Keep it aside for 10-15 minutes. This is to help in setting of glue and to give a crease.

Note: If you are want to tan the leather then do it at the end of this step because tanning later could change the color of the thread.

Step 3: Making the X Stitch

I didn't want my cover to look very plain, so I decided to stitch a X mark on the front side.

After the glue's hardened and dried using the 6 prong chisel make some holes into the leather for stitching.

Find a level surface and put some excess paper/cardboard under the leather. Using a ruler, mark two intersecting lines about 6cm in lenght making a X. This will be your guide as you use the Leather chisel. Later, while we saddle stitch the leather, the thread will slide in the grooves. Start making holes with the six prong chisel. Make sure you are holding the tool perpendicular to the leather and use the hammer to make the holes. To have a straight pattern, insert the first few points of the tool into the previously formed holes using them as a guide.

Then using the two needles I saddle stitched the X mark. You can use a single needle also, you'll just have to do alternate stitching along the line and then reverse the direction to get a continuous stitch line.

For saddle stitch

Thread the needle. Then, pull about 5 cm of the thread through. Take the tip of the needle and press it into the waxed thread. The thread should slip open and let the needle go through. Then pull the needle and it should lock in place.
Make the length of the thread three to four times the length you needed to stitch. This will give you enough room to move the needles around and not run out of string.
Do the same procedure with the other needle.
To make the stitches pass the needle through the corner groove.
To proceed with saddle stich, check one of the best instructable available.

Note: If you want to make any pattern on any side of the cover you'll have to do it in this step only as it won't be possible after the two edges are stitched together.

Step 4: Gluing the Edges

Apply a thin layer of rubber adhesive on the edges along the white line shown in the image. Do not Bond Immediately, wait for 2-3 minutes before sticking. I've kept the iTouch to give reference of the margins.

Clamp the glued leather using the two piece of wood and clamps. Keep it aside for 30 minutes.

Note: Don't apply glue on the dashed black lines, as this portion of the edges will be open and will be used to plug the headphones in.

Step 5: Stitching the Edges

After the glue's hardened and dried using the 6 prong chisel make some holes into the leather for stitching.
Find a level surface and put some excess paper/cardboard under the leather. Using a ruler, mark a line 6mm inside the glued edge, shown as a white line in the image. This will be your guide as you use the Leather chisel. Later, while we saddle stitch the leather, the thread will slide in the grooves. Start making holes with the six prong chisel. Make sure you are holding the tool perpendicular to the leather and use the hammer to make the holes. To have a straight pattern, insert the first few points of the tool into the previously formed holes using them as a guide.

For saddle stitch follow the instructions given in Step 3.

Note: Please refer the image to see where to stitch

Step 6: Finishing the Edges

After stitching everything, it's time to finish the edges. I had kept a bit of margin and finished off the two glued edges with the cutter. Sand edges of the sides with fine sandpaper to level it out if it's a bit uneven.

I didn't burnish my covers edges as they had come quiet clean. You can use a bit of water or polish on the edges and then using a burnisher you can finish the edges. It's up to you.

Step 7: Polishing the Cover

Round the bottom and top corner according to your preference.

Polish your cover using leather polish or leave it the way it is. I used a very small amount of polish as I already like the color of leather I'm using.

And you are done!