Found New Hardware error when installing 2.0 upgrade?

I have been trying to upgrade from 1.1.4 (with software upgrade) to the 2.0 version. When I do this, everything is fine until it tries to prepare my iPod for the upgrade. Each time, my iPod will appear to reset, but it goes to a black screen, and then Windows begins to detect two USB devices (unknown) and can't find any software for them. So, the upgrade fails, it makes the iPod unusable (stays at the original recovery mode screen), and I can't recover unless I restore to version 1.1.4. Then, my old apps do not come back - it gives me an error (-4) when trying to sync the January software upgrade. I have tried multiple USB ports, and different user accounts. No luck. Any help would be greatly appreciated.

Firstly, try reinstalling iTunes, if that fails, you can try completely resetting your iPod.
This will reset every setting and remove everything - all music, videos photos - from the iPod. It may not fix it, worth a try though. You get the Jan upgrade apps in the 2.0 so don't worry. To do this;
Settings>General>About>Reset. I think it's that, iPod is sycing at the moment, so can't double check.
It takes ages and you'll have to re-sync it all, but might resolve your issue. It might however be Windows playing up.
Hope this helps.

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