Make sure you try the steps in this article before you send it in for repair:
http://docs.info.apple.com/article.html?artnum=61584
Using these steps, I got my iPod to go into disk mode. when I connected it, I initialized the disk. Disk Utility popped up so I used it to erase the iPod and reformat it, although I'm not sure that step was totally necessary. iPod updater came up automatically and prompted me to restore. After restoring (which erases all the data on your iPod, fyi), I unplugged it, reset it (toggled the hold switch on-off, hold down menu and play/pause buttons), and then it prompted me to plug it back into the computer. Now it is copying music!
good luck!