IPod software 1.1 will NOT install.

new ipod nano for Xmas.
Latest version of software 1.1 will NOT install.
I get a message saying "new version available", i tell it to install, it extracts, turns ipod on and off, but when it eventually comes back...it says:
"New version available" and it still has it's own version of 1.0.3 listed.
I tried Restore with "current(1.0.3)".
I tried Restore with "new" version.
Nothing.

GOT IT TO WORK!
HOWEVER The way i got it to work was to go to a completely different machine download 1.1 there and apply by hooking up iPod.
As much as I love my iPOd, there are some serious issues with iTunes + iPod + Windows

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