Can't set automatic downloads on iPod Touch 4g (Required for Find my iPod functionality) Settings > Store

The automatic download options for Music and Apps are OFF, and whenever I try to set them ON the switch returns to OFF immediately.

This is supposed to be the last step to set up the Find My iPod app.

The check boxes for these automatic downloads are already checked in iTunes on my Windows 7 machine. iCloud is set on it too. I don't know what to do. I'm signed up in icloud from my iPod and laptop.
I don't think you need to turn on automatic updates to activate Find My iPod. Anywho, I suggest you simply log out from your iTunes account and log back in.

Do this by going to Settings > Store and tapping Sign Out. Then Sign back in again.