Second sync of iPod 5G fails, Right Click Sync or Apply

When I first plug my iPod 5G into my Mac Pro, it automatically updates, like it should. When I right click on the iPod in iTunes and click "Sync," however, iTunes says updating iPod, but the iPod itself does nothing. Eventially I get a message in the top window in iTunes: "iPod update failed. Disconnect and reconnect, then try again."
The same issue happens if I also make any changes to the iPod preferences in iTunes and click Apply.
This issue started last week under iTunes 6, and continues under iTunes 7.
I tried a full reset of the iPod, trash of all iPod and iTunes prefs, Premission Fix, and the issue continues.
All latest firmware and system updates.
Any thoughts??
Thanks, Scott K.

Tweekme-
I get the same error with my 30G video iPod. It will update normally when first plugged in but if I make any changes and click "apply" then the link times out and I get "The settings could not be saved because the iPod can not be found."
The iPod icon is in my device list and I can browse it's contents.
I am flying out this afternoon and have desperately been trying to add some videos to watch since last night! I will try to restore the iPod and re-load the most recent software. (I already ran the 1.2 upgragde)

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