Cannot update to software 1.2

Today I purchased a 2nd generation nano that I plan to use with the Nike + iPod system (I bought the sport kit too). The instructions say that I must have software version 1.2 on my nano in order for the Nike + thing to work. However, I cannot get 1.2 on my nano because I have no idea where to get it. I am using iTunes 7.0.1 and it says my software is up to date and offers no other software. I even tried doing the restore method. My nano currently has software version 1.0.2 on it. I tried downloading the iPod software Updater but of course that does not work now that I have iTunes 7.
My question is how do I get version 1.2? Should iTunes 7 automatically know that the version is available and download it? Can I still use the Nike + system even with 1.0.2?
Thanks for any help!
Apple 15" PowerBook G4   Mac OS X (10.4.8)  

I'm not even getting to the point where iTunes 7 tells me update to 1.2 is available. It doesn't even realize it is available. So you are at least one step ahead of me. Does anyone know if there is a way to manually download 1.2 into iTunes? I tried check for updates but that only pertains to the version of iTunes.
Also, I did plug in the Nike + device into my nano and immediately a menu option for Nike + showed up. After I unplugged the the device and plugged my nano back into my computer it asked me about transferring my Nike + data. So does that mean it will still work without 1.2?
I think it says below, but just in case I am using a PowerBook G4 with Mac OS X 10.4.8.

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