Ipod causes Itunes to not respond,unable to restore - another app running

I am an original Ipod mini user.I have not had many previous problems.Now,I want to update my Ipod but I get into a very frustrating loop when I connect my Ipod to Itunes 7.0.29-latest version. My Ipod is recognized but the program freezes after a very short while.I have to go to Task Manager to unfreeze the software and I cannot get anything to load onto the Ipod. When I go to restore the Ipod,I get a message that it "cannot be restored because another application is running".This is frustrating because there is nothing else running.
I am in a no win loop that I cannot recover from.Can someone please help.
Thanks,
drcg

Have you disable the anti-virus software yet?

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