New iPod Nano isn't being recognized, with "Use iTunes to restore"

I got this new Nano yesterday and I took it out the box, tried it for a while, etc. I then installed iTunes 9 and after that everything was fine, so I plugged it in, hoping to sync it with my library and charge it. It did both for a while. Unfortunately, it was at this moment my PC decided lock up, and I had to use CAD to stop all the programs that were running, including iTunes, with the Nano still plugged in. Now the only functions of the Nano are to show the Apple logo for a bit, go to black and then show the "Use iTunes to restore" screen. I Googled and found that this means it needs to be formatted for Windows use. However, I plug it in and Windows refuses to recognize it, as does iTunes. However, it does connect when I press both the select and menu buttons (I tried to put it into disk mode, but this doesn't work) only to disconnect a few seconds later when iTunes tries to download the recovery software. Can anyone help? Nothing is working. Thanks.

I have also just installed my new Nano, had to upgrade to itunes V9, this worked eventually and then the nano locked up along with the PC. rebooted the PC, reset the Nano, all looked good until I tried to reconnect the Nano to the PC. it connected and then immediately disconnected and itunes gave an error saying that it couldn't read the ipod, try to reconnect.

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