My Ipod on it's own works fine, but when I connect it to Itunes it tells me that it is in recovery mode, over and over again!!!! PLEASE HELP!!!

I restore it, but when it's restored the same message comes up. Also, since I've done this, my Ipod restarts itself everytime I disconnect. HELP!!!

by reset option do you mean the DFU restore? worked for me, have you tried that?
if not - hold the lock and home button until the power down bar comes up. then hold the lock button for ten seconds - next continue to hold the lock button and press the home button for ten seconds - next release the lock button and hold the home button for 10 seconds. this should be done with the phone tethered. If done right and your itunes is configured as such, the phone will reload the drivers and start up itunes, and then prompt for a restore/update.

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