Ipod Touch Stuck On iTunes Screen. The iPod 'iPod' cannot be restored at this time because the ipod software update server could not be contacted or is temporarily unavailable.

Question

I got a new ipod touch for Christmas.
Today I was going to put music on it, i was told there was updates.
So I went ahead to do them.
My Ipod is stuck on the screen with the usb cord pointing to the itunes logo.
In Itunes i'm told :
Itunes has dected an ipod in recovery mode. You must restore this ipod before it can be used with itunes.
Turning the ipod off - the same screen appears when it's back on.
When I click restore ipod and after restore and update is clicked ; Extracting software loads up at the top.
When its done this is the message I get:
The iPod 'iPod' cannot be restored at this time because the ipod software update server could not be contacted or is temporarily unavailable.
I've been looking up trying to figure it out myself and have read making sure a setting in Lan Settings in Internet Properties has ; Automatically detect settings checked. I still get the same ipod message.
I've tried holding the power and home key to turn it off, then powering it back on. But that doesn't work.
I installed itunes today, so its up to date - I checked.
I don't know what else to do.
Can someone help me out, please? :}
The operating system was ios 5 something? It wanted to update to 6 i believe.

Answer 1

I've tried the top part but now that i've looked to the bottom:
Additional Information
The “hosts” file may also be blocking gs.apple.com.
Select the hosts file (normally you can find your hosts file at C:\WINDOWS\SYSTEM32\DRIVERS\ETC).
I put this in the url bar?
When it gives me the list of names, im not sure what to do from there. The steps aren't that clear for me.