Water and electronics certainly do not mix. But if your iPod has been damaged by water, you might be able to salvage it. Though this is by no means a guarantee, if you follow these steps your iPod will be more likely to come back to life after the water damage than if you just accept defeat.
Do not press any buttons or turn the click wheel after the damage has been done. The iPod's screen will be blank; this is normal. Attempting to press any buttons may shift the moisture inside the unit caused by the water damage, which can result in it pooling under the buttons. This will render the iPod inoperable.
Lay the iPod on a flat surface under a bright light. This will moisture near the iPod's surface to evaporate through the tiny craks in the iPod's shell. The amount of time you need to leave the iPod under the light will vary depending on how wet it is. Light to moderate damage should only need one to two hours of light, but more severe water damage will need up to five hours.
Get a medium-sized bowl and fill it with uncooked rice. Although it may sound a little strange, placing the iPod LCD face down in a bowl of rice will help pull out the moisture.
Leave the iPod in this bowl for 2 to 3 days. Do not disturb the rice or try to replace it during this time.
Pull the iPod out of its rice bowl and immediately plug it in to a computer. If you see a "do not disconnect" symbol, then your iPod has survived the water damage. If not, then you will need to replace it.