Version 2 Shuffle not recognised by iTunes

Question

Greetings to all,
I hope that someone out there can help me as the Apple Centre, after 89 minutes couldn't help, (that's £9 I can't get back!)
Anyway, I bought a blue Version 2 Shuffle last month, plugged it in and iTunes burst into life, except that it, and the desktop, showed the shuffle as a white iPod! Weird! Anyway I downloaded a playlist of 95 tracks, only to find that 70 tracks showed on the shuffle....okay very weird....Also a message saying that I was running an old verion of iPod software yadda, yadda, yadda! And I should download the latest version.....easier said than done! The front page of iTune (under "device") showed 4 pages, ie Summary, Music, Podcasts, and Audiobooks???? very very weird.......and to cap it all the software version said N/A, the serial number said N/A, the format said Windows(???) and I had a "greyed out" restore section. Meaning I couldn't get an update/restore even if I wanted to.
The tracks on the shuffle didn't include any Apple lossless files, even though I have a version 3 30Gb ipod that works fine with everthing on my Mac! Also my wife's 4Gb nano works fine as well. Anyway when I switched my shuffle on, it did that mutiblink thing with the lights indicating firmware problems............****!
I took it back to the store, it worked fine on their mac, a MacPro. They restored it, it played music, went home, plugged it in....it didn't work, returned it, same thing happened, they wouldn't replace it, said their engineer would make a decision over it, 3 days later...he said it was fine. Rang Apple Centre (89 min call, and 4 specialists later) they replaced it with a new one. Plugged it in, drum roll please....same **** thing! So I did the discussions route, I downloaded Ipod Restore Utility, it said it couldn't work on this iPod, hmmmm, tried Disc Utility, restored it as Mac Extended Journaled ( at least it shows as "Macintosh Format" on iTunes now).
It still however wouldn't play any music, I am running out of options, oh I also install a Sonneto USB 2.0 PCI card to upgrade my USB 1.1 ports, still no effect.
I have the current iTunes, 7.1.1
I am running OS 10.4.9.
I am getting grey hairs.
Please help.
G4 Quicksilver PowerPC   Mac OS X (10.4.9)   733MHz, 760MB, 40Gb + 250gb

Answer 1

1) This is true. Disk Utility is not helpful in this situation because the shuffle (along with most new mactel stuff) is default FAT32 and NOT mac format. So I tried what you did too and it is not possible to have a mac formatted 2nd ipod shuffle to "trick" it into working like a normal ipod.
2) This is also true though because you are never seeing the correct settings tab for the shuffle there was really no way for you to know this...
3) This has been mentioned before but I do not understand it enough to attempt it as a fix or solution to this problem...and to be quite honest it sounds alot like throwing the baby out with the bath water to me. Maybe if Deggie could post more specific information as to what "driver' is damaged this solution would make more sense. After all the drivers necessary for recognition of the device are USB related in the case of the shuffle. So is Deggie saying the USB driver is damaged? In my situation, if this were indeed the case then why is the Finder able to recognize the USB shuffle...along with all my other myriad of USB drives and devices?
Please understand my hesitation at the suggestion that the problem is the OS, especially when everything else is working absolutely perfectly. It may in the future come down to me rebuilding my laptop just to get iTunes to recognize my 2nd gen ipod shuffle, but I just think that is a undocumented risk. Rebuilding your system is any tech's LAST RESORT and I think it is fine to suggest to someone but especially for legacy mac users using it can introduce more problems than it is worth. (not to mention it might not fix anything at all!)
just my opinion in trying to solve this issue...
  Mac OS X (10.4.9)