How would I connect an Ipod to a home stereo? I have an Ipod Touch 2nd gen. 8 gig and a Pioneer VSX-80TXV.

Pioneer used to make a universal Ipod dock but it's no longer available and I don't think it's compatible with the Ipod Touch even if I could find one.

I read somewhere that I should be able to connect via cable but I'm not sure what kind of cable I should be looking for.

All iPods have a universal connector across the entire range, so one size does fit all.

Now you have a couple of ways to do this.
1/ Simple iPod to stereo via a standard phone cable.
Something like this would do it
http://ecx.images-amazon.com/images/I/41NQCKPTmsL._AA500_.jpg (http://www.amazon.com/Audio-Cable-iPhone-Apple-Connector/dp/B003L13BNI/ref=sr_1_23?ie=UTF8&qid=1320876562&sr=8-23)
http://www.amazon.com/Audio-Cable-iPhone-Apple-Connector/dp/B003L13BNI/ref=sr_1_23?ie=UTF8&qid=1320876562&sr=8-23

2/ get a iPod dock.
These are simple a set of speakers that you can pull the Ipod directly into.
There's many different designs to choose from.
Ipod Docks from Amazon (http://www.amazon.com/s/ref=nb_sb_noss?url=search-alias%3Delectronics&field-keywords=ipod+dock&x=0&y=0)

Hopefully this give you some ideas.

Thanks, Curly. But my stereo doesn't have a USB port. I've been doing some research and I think I found the cable that I need. It's a mini-stereo plug on one end and 2 RCA plugs on the other end. Now I'm shopping. :)

The one I pictured above has both USB and normal Phono.
The Large plug on the other end is the iPod connector I described.
Keeps your options open that way ;)

There's loads to choose from..

The one you describe takes the headphone output from the iPod and then inturn to the stereo.
If you have a Best Buy, or similar near you, might be worth a visit and look see.
Always helps to physically have these things in your hand if you are unsure.