Hey!!
Well ... After about 3 months of searching, going to the apple Genius bar... (seriously they wanted me to delete my stuff... I couldn't live without my books I downloaded from drinkmalk.com which is now defunct)
So.. I am running a Dell Studio 1557 Windows 7 (no SP installed yet), 64 Bit and I own a 3rd Generation Ipod Touch, 32 Gig and had many of the same problems. In my case... I was able to update software, but I couldn't sync music onto my ipod or transfer purchases I would get: Internal Device error, operation failed... etc etc.. .every sync error you can think of...
MAGIC FIX (For me.. and other users)
1. There is a known bug that says its a chipset issue (Just google Ipod sync chipset issues and realize you aren't alone)... Most likely you don't Have a PCI card slot to put a new usb thing on... so.. that is a no go...
2. SOLUTION (that worked for me) - UPDATE THE BIOS on your PC. If you go to your computer manufacturer's driver site... you can search for these updates. Chances are... you have the version that was installed on your computer that is out of date (its not one of those things that automatically updates). For the most part, you never really need to update it since it doesn't affect regular functioning... most people update it on the advice of a technician. Either way, I went to the Dell support site, looked up my laptop and found the install file.
WARNING
BACK UP YOUR HARD DRIVE AHEAD OF TIME IF YOU DECIDE TO DO THIS!! ALSO, RESEARCH HOW TO MAKE A BIOS RECOVERY DISK IN THE CASE IT CRASHES.. BETTER YET, CONSULT YOUR LOCAL GEEK FOR SUPERVISION, IF FOR ANY REASON THE BIOS UPDATE FAILS AND IT DOES HAPPEN SINCE WE KNOW PC's are WONKY... YOU MAY RISK BRICKING YOUR COMPUTER... Just google "Bios Update Failure" to see the horror stories..
However.. that said and done.. I updated it ... made the mistakes above and was able to get my computer back by leaving the battery out for an hour, pressing the power button for 30 seconds and restarting ... after the failure scare... saved me 200 bucks from dell customer service
Good News: With the updated bios... SYNC WORKS PERFECTLY!! I can put music on, transfer stuff out... no errors!! =) JOY!