Ok i had the EXACT same problem. Thx for all the help guys and i think i found a solution! Recently, i dloaded a pretty sweet XP skin that makes it look like vista. If you have ANYTHING like that it will screw up ur ipod no joke. I was ready to scream until i got directed to this page.
http://docs.info.apple.com/article.html?artnum=304996
And saw this paragraph
"This symptom may also be caused by software applications which change the appearance of Windows XP. Try deleting or removing any third-party Windows OS skins, Windows themes, or desktop mods that are installed to resolve the iTunes Error -50 issue when syncing your iPod to Windows XP."
One quick uninstall and reboot later... My ipod works perfectly amazingly fine. I have to share this with you guys, again thanks for all your help getting me on the right track!