Shuffle wierdness

If I pulg the shuffle into my ibook it works flawlessly. if I plug it into my g5 imac - it shows up on desktop, opens itunes, shows up in itunes - then a window pops up asking if I want to update it (it already has the most recent update). If I click OK it atemps to update, but then has greyd out buttons. If I click cancel, it proceeds back to itunes and apears to load songs - but - there is no choice for auto update and the songs that are visible in the shuffle are greyed.

Both machines(ibook and imac) have latest and most recent software.

Apple store has no idea

***???