Try uninstalling the USB drivers for the iPod (
http://docs.info.apple.com/article.html?artnum=305136).
Also, you may want to try testing with another cable, because some cables with a faulty connection can make that error appear on a Windows computer.
If those don't work, you may need a driver update for the computer. The main driver the iPod runs from is in C:\Windows\INF, and is called USBStor. YOu may also want to try finding and re-downloading USBStor.inf from a 3rd party website (as Microsoft doesn't host this file to download).