When updating or restoring some iPods via a usb connection, it needs to be plugged into power via the charger to complete the process, and this is why you see this icon displayed.
It's also why older iPods that required this step were supplied with a power adaptor as standard.
You may be able to complete the process via a car charger, or via a powered firewire port on the computer (with the required 6 pin cable of course) if you have access to either of those. Or maybe visit an Apple store if one is nearby.
Or you can try this.
No power adaptor? Try this.
Other than that, your iPod cannot be used until you complete this process.
And btw, your iPod is not an iPod classic.