Help, this has been driving me nuts! I have been reading all the posts on this subject and nothing has worked! I've changed drive letters, turned off firewall, disabled anti-virus, updated drivers, updated my dll's, have the most recent iTunes, changed USB ports and disconnected all USB devices. I still cannot update iPod from 1.1.1 to 1.3.1, I get a 1417 Error. I try to use current version to Restore and I get a "cannot restore because files are in use by another application".
Does anybody have any advice or other tricks that I can try?
If you continue to get the "file in use" message, check the settings on ALL of your antivirus/antispyware software and make sure in preferences they are set not to scan iPods.