Yup! iTunes can be user unfriendly (to me, anyway).
I don't have an iPod, but I do have an iPhone and had very similar sounding problems to yours following an involuntary reload of iTunes..
In the end, I only got round it by doing a reset on the iPhone (whilst disconnected) and then plugging it in. Eventually, I then managed to do a full reset on the iPhone from iTunes and started a rebuild of the phone from there.