Cliff,
Try something for me:
1. Quit iTunes and disconnect the iPod.
2. If you have the iPodService running -- Right click task bar, select "Task Manager", click on Processes tab. If you find "iPodService.exe" in the list, select it and stop it.
3. Register Atl.dll manually. In Windows, click Start, and then click Run.
The Run dialog box appears. In the Open box, type "regsvr32 atl.dll". Hit return. Do you get a message? What does the message say?
4. Then in Windows, click Start and then click Run. Type in "cmd", hit return. In the dialog that comes up, at the prompt type in "C:\Program Files\iPod\bin\iPodService.exe /service"
5. Run iTunes and connect the iPod back up to it.
Does it work now?