iPod says "Connected" but iTunes does not recognize

Try resetting your iPod. This is probably different for different generations of iPod, but you can find the correct procedure in your manual. For mine, I first must flip the "hold" button on the bottom of the iPod to red and then to normal. Then press and hold the center of the click wheel and the top (menu side) of the click wheel simultaneously for 10 seconds. When I release the unit rests. It takes a minute or so. Then connect the iPod and iTunes will find it. If it still doesn't work properly try selecting "Restore" on iTunes while the iPod is connected.