Why games claimed to be compatible with 3rd Gen iPod won't run on my 3rd Gen iPod 8GB?
They never actually made an 8GB iPod Touch 3rd Generation. What they did was lower the price of the 8GB iPod Touch from 229 to 199 and sold it along side the actual 3rd Generation 32GB and 64GB iPod Touches of that year.  

Technically what you hold in your hand is an iPod Touch 2nd Generation. You're not the first person to notice these kinds of things, especially since there was a lot of confusion at Apple and 3rd Party Retailers when it came to selling this device.

A lot of people around the internet have the same issue when it comes to software and when it comes to what Generation it actually is. 

https://discussions.apple.com/thread/2777426?start=0&amp;tstart=0

http://answers.yahoo.com/question/index?qid=20110111210334AAlplU9

http://www.ifans.com/forums/threads/2g-or-3g-which-do-i-have.251593/

Sorry that it won't work and for all the confusion.  I hope that this information helps you out.