[Restore] "Waiting for iPod to become Ready"? [ver 1.2 iTunes 7.0]

I just updated my iTunes from version 6.0.5 to 7.0. This install also updated my iPod. My iPod is no longer read by my computer or any other. ***? Now when I attmept to connect it to any Mac it freezes up and fails to mount. Come on apple. Also, why the is there no longer an iPod preference section in the new iTunes. I keep trying to Restore the firmware, but I keep getting the "Waiting for iPod to become ready" message.
Attempted solutions:
• Re-installing iTunes 7.0 (no luck)
• Resetting the iPod (no luck)
• Forcing the iPod into disk mode (no luck)
• Re-installing iPod software (iPod won't mount...so that didn't work)
HELP!!!

You may want to look at this:
http://docs.info.apple.com/article.html?artnum=61705
You may want to look at this:
http://docs.info.apple.com/article.html?artnum=61705
I had the same problem and was able to fix it by following the directions on resetting the iPod, renaming the iPod and also ensuring that I removed any files that might not be understood by the iPod from the 'notes' folder on the iPod (if you have enabled disk access):
http://discussions.apple.com/message.jspa?messageID=3111498#3111498
PS: If you need to get out of the 'Do not disconnect' screen so that you can apply these changes you need to hold down the 'menu' and 'select' or center button until you see the Apple logo. When the iPod mount you can proceed to reset the iPod to original settings which will erase everything from the iPod but not your iTunes library on your computer

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See Here...
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http://support.apple.com/kb/TS1567

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error 21:
These errors typically occur when security software interferes with the restore and update process. FollowTroubleshooting security software issues to resolve this issue. In rare cases, these errors may be a hardware issue. If the errors persist on another computer, the device may need service.
error 1600:
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error 9:
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SIDE NOTE: For a TL:DR, I've made all the important stuff bold.
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How to put iPod touch / iPhone into DFU mode « Karthik's scribblings
- Make an appointment at the Genius Bar of an Apple store.
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[Restore] "Waiting for iPod to become Ready"? [ver 1.2 iTunes 7.0]

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