I get the"download iPod updater"message &downloading the updater won't help

Here's what happened:
I plugged my iPod into my iTunes to put music on it.
It says "Do Not Disconnect" like it alwasys does, but this time doesn't go away. It stays for 45 minutes. IN an act of desperation, I disconnect.
I lose everything.
"Not a big deal" I think, because I can just put the stuff on my iPod again.
I connect the two, I get the "download iPod updater" message. I download it. Same thing.
I uninstall and reinstall about 3 times.
Still same thing.
PLEASE HELP.

im having pretty much the EXACT same problem with mine. tried the "5 r's" yadda yadda, completely useless. this is my second ipod, i had a 4G that died a few months ago, which had the same problem, but about 6 months after i bought it. my 5G is brand new, got it for xmas like most people, next day i plug it in and BAM, its been blinking that **** little red circle for days and ive tried everything. im just gonna make use of my warrenty and send it in for repairs. ill post if i figure something out before then.

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