Connect the iPod and run iTunes. In iTunes, select the iPod in the sidebar, under DEVICES. Over to the right, go to the Summary tab. There is a Restore button there. Click it and follow the prompts. This will erase the iPod, re-install its software, and set it to default settings. When the iPod restarts, iTunes will ask if you want to sync the iPod to your iTunes library; decline to do so.
Basically, it will be like it was when you bought it.