3rd gen 8GB ipod touch stuck on connect to itunes

This isn't fair. I just bought this 3rd gen 8gb ipod touch (my first ipod ever, only owned Mp3 players) from best buy today and i can't even use it...
I'm going to start from square one, this will be long-winded, so forgive me in advance. But detail might help you guys help me out...
Okay, all giddy with excitement I boot up my touch for the first time. It tells me to connect it to itunes. I do that, hooking up the touch to the computer via usb. Vista detects it, installs the "apple mobile device" drivers just fine. Good, so then I open up itunes -- latest version -- and it's telling me to set up my ipod; name it, etc. Alright, I'm almost bursting at the seams here with excitement, but then itunes is notifying me that iOS4 is out. I upgrade, it takes a few minutes to do its stuff, it's done, and bam it's working. I play with the ipod a little bit, looking at the apps that already came with it. I disconnect, play with it, then reconnect to the computer again.
So now, itunes for some reason is doing a "recovery" process -- i did not tell it to initiate this. So it's in the process of "recovering" (backing up, i guess?) and Vista is prompting me to install the driver "Apple Mobile Device (Recovery)" I tell it ok, locate and install them. It does that, I'm guessing, for it's now prompting me to insert a CD. Well, there is no CD so I tell it to find this driver on the internet. It says "cannot find drivers check manufacturer's support site blah blah blah." At this point, itunes tells me that it cannot complete the "recovery process" -- no error code or anything, and the dialog box closes.
Now, my ipod goes into the connect to itunes screen. Itunes does not recognize it, for it does not even display my ipod at all. Vista does however, and each time i connect the ipod to the computer it attempts to install the "apple mobile device (recovery)" driver and fails each time. I don't know what's happening. I've lost all functionality in my ipod, can't even get into DFU. iTunes just refuses to recognize it. I've tried all of those fixes (reinstalling itunes, rebooting, trying that method where you go into device manager and update the apple mobile device (recovery) drivers....all of it doesn't work). I've spent hours websearching...
And I'm at a loss. I'm ready to throw this thing somewhere. Can you guys suggest any help for me? Please...
Message was edited by: regal
I didn't leave it connected - sorry. edit by regal

What did you do, I'm having the same problem, and also about to chuck the thing in a lake... help!!!

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