New Nano Owner Lost

OK so my girlfriend bought me the new 2nd gen Nano for Christmas. Totally digging it until today!
I was deleting music off of iTunes and after I finished I plugged the Nano in to update it. The only catch is My Computer and iTines do NOT recognize the iPod at all!
I tried restarting, I tried another USB port (front & back), I tried un/reinstalling iTunes, then finally in a last ditch effort updated to 7.0.2.
I bought a DLO FM transmitter for my car and the thing works fine, I'm worried it might have messed up connections but I highly doubt it. The USB cable seems to be working because it charges the iPod.
I am so lost right now! Is this something that I will have to get used to as an iPod owner?
PLEASE SOEMONE HELP ME! I am not that computer literate and need some serious help.
- Ryan
  Windows XP  

Ryan,
Have a look at this article in the Apple Knowledge Base and see if any of the suggestions solve your problem.

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