Useful info as it turns out, snowy.
Just updated iPod no.3 to version 3.0 software and it died - exactly as the first two had. Tried the hard restore (hold both buttons for 10sec, then just home button for 6sec) and ITunes (open) recognised an iPod in restore mode.
Just clicked the restore button and it seemed to work until the final software/firmware update when it kept crashing again. Tries it 3 times, which eventually left me with an iPod which did not work - apple logo appears and then it's just backlit but no actual startup possible - but which iTunes recognises as being in restore mode just by connecting it. It just couldn't fix it.
However, this did show there was some life in it, so I took it to another computer (PC running XP), downloaded iTunes and tried again. Lo and behold, it actually worked. iPod touch now running version 3.0 but has nothing on it whatsoever.
Next step is to take it back to the original laptop and see if I can restore all the music, applications, contacts, photos....not very confident...
