IPod Nano stuck in recovery mode

Hi,
I recently installed iTunes 7 on my new work PC and connected my iPod Nano (1st gen) to it for the first time. I was told that iTunes had detected an iPod in recovery mode and it needed to restore factory settings. I proceeded with this, and after this completed iTunes suggested I needed to update the software on my iPod, which I also completed (from 1.1 to 1.3)
My problem is that every time I plug my iPod in, iTunes tells me that it has detected an iPod in recovery mode, and needs to restore factory settings. When I do this, factory settings are restored, iTunes redects the iPod, and the same message comes up again, about iTunes detecting an iPod in recovery mode.
I seem to be stuck in this loop, and don't know what to do to fix it. I have tried all the obvious things (PC restart, different USB port, lastest iTunes software) but none of these seem to fix the problem. I cannot copy any music to my iPod.
I am very grateful for any help you can provide.
Thanx
Mark
Pentium 4   Windows XP Pro  

okay, that relentless "recovery mode" message can sometimes be produced by a Windows drive letter confusion. for troubleshooting advice on that, see the following document:
"iTunes has detected an iPod in recovery mode - Use iTunes to restore"

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