IPod Shuffle 2nd gen and Mac problem/troubleshooting guide

Ok, warning this is going to be a little long...
The problem: Brand spanking new out of the box ipod shuffle 2nd gen won't play songs after ipod assistant setup. Flashing green/orange lights. Also will not update or restore (greyed out). Shows up as formatted for Windows. Software and Serial show up as "n/a".
System specs: Powerbook G4 17inch 1ghz, 1gb RAM, 10.4.9 running iTunes 7.1.1
Attempted solutions that have NOT worked:
1) mac retail store visit to genius bar. it restored on mactel machine. worked and played songs. unfortunately resyncing to my library caused ipod to return to problems above immediately.
2) another mac retail store visit to genius bar, this time with laptop to show them the problem. they told me it was my machine not the shuffle. i explained i am a mac sys admin and that is ridiculous...my machine though a few years old is completely up to date. we then deleted all receipts out of the Library dealing with iTunes and reinstalled iTunes via software update. same problem immediately after the setup assistant. no software version and no choice to update or restore ipod. downloaded the ipod reset utility for mac for 2nd gen shuffle and error message shows "the selected ipod is not supported by this utility". also shuffle icon shows up as generic white ipod. mac genius stumped so they swap out my brand new shuffle for another brand new shuffle.
3) 2nd shuffle in a week and same problems occur. will not update in iTunes. will not restore in iTunes. will not restore in ipod reset utility. icon shows generic white ipod. i can copy music to it but it will not play, lights flash green and orange.
4) tried to use disk utility to reformat. erase using MS-DOS, but it says FAT16 instead of FAT32. same problems as above.
*weird that I can't reformat to FAT32 when selecting the MS-DOS format. I only see FAT16 as a choice. Disk utility should do FAT32 but I can't seem to get it to work on shuffle and i don't have a spare hard drive to test it on. Anyone have any experience reformatting ipods via Disk Utility to windows format? Please share...
At this point I have access to a mactel book and will attempt to fix it on the newer machine. I will be very upset if it works because there is nothing saying that you need new hardware to use the new shuffle. i also get the usb 1.1 error message but again there is nothing saying you need usb 2.0 for shuffle use.
if anyone has tried anything different with good results please respond! from my experience this seems to be an issue specifically between older mac ppc machines and the new windows drivers installed on the shuffle. i use windows drives all the time with my mac and there are no problems. however a brand new ipod shuffle 2nd gen out of the box does not seem to like my older machine...even after two reinstalls of itunes! even the reset utility is not working as described....
any help with this is much appreciated!!!
Powerbook G4, 1ghz, 1gb RAM, usb 1.1, 17inch Mac OS X (10.4.9)

Ok here it is, my final post on thoughts on this issue...
Unfortunately, my guess was correct, there does seem to be a hardware issue related to iTunes 7.1.1 and whether it is on a mactel machine or an older ppc machine.
I can confirm this because the ipod settings screen on my older PPC powerbook is TOTALLY different than the screen I saw on the newer mactel macbooks, even though the software version says its EXACTLY THE SAME! (iTunes 7.1.1)
On a mactel macbook, I see the ipod shuffle settings such as "Autofill" etc with the correct icon and software version and serial number.
On my PPC powerbook, I see a generic white ipod icon (even though the finder shows the correct icon of my 2nd gen shuffle) and the settings tab for the ipod is completely different....the update and restore continued to be grayed out, there is no software version or serial number available as well. This is probably why I am not able to register my ipod shuffle from my machine.
I did not erase and resync the ipod shuffle to my PPC machine to see if that would allow it to continue working. So far so good. After unmounting, it still plays songs. However, I checked the "manage songs manually" option and added just one more song to the shuffle. I tried to then play that song but it would not play even though it was copied onto the shuffle...I could play it from the ipod via iTunes but not when I was just listening to the shuffle. I confirmed this with the application "PodWorks", the song I copied from my library does NOT show up in the list of songs on my ipod shuffle...however it DOES show up and play in iTunes.
So I feel pretty stuck right now...
I can have a working ipod shuffle but NOT from my ipod library. It seems I can only listen to songs off my friends newer machines because for whatever reason, the ipod shuffle DOES NOT WORK with a PPC Powerbook 17inch, 1ghz, 1gb RAM, 10.4.9 running the current latest version of iTunes 7.1.1.
***** to be me. Anyone else come to same conclusion?
If this is real then other users with older macs should not waste their money on the 2nd generation ipod shuffle. Please respond if you have any suggestions or thoughts on this matter.
Mac OS X (10.4.9)

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