FYI.
I had problems with my 160GB drive. Briefly, if you restored it, it worked up to a point. You could get a couple of gig of songs on it and all would be fine. But if you kept going you'd hear some whirring and chirping and everything would lock-up.
My computer is running XP SP3.
I could still put the iPod into disk mode. If I opened a command prompt window and ran chkdsk it would show multiple file errors. If I ran chkdsk /R the errors would be fixed.
But then if you restored it and started putting music on it, it would lock-up again.
So I decided it would be best to reform the drive. To do that I had to discover the utility Fat32Formatter. But when I tried it, it stated that the partition had collapsed and that the drive needed to be initialized. I tried to use the initialize feature of Fat32Formatter, but still got the message that the partition had collapsed.
I then discovered EASEUS Partition Master, which I can strongly recommend.
I'm happy to say that I repartitioned the drive this weekend. So far (knock on wood) it's working fine.
I pretty much used the Partition Master default values. It allowed me to select 100 GB of the drive (the surface test starting failing just a bit beyond that point), specify the partition as primary and FAT32 reformat it.
I used the default cluster size, I believe it was 64K. I left the partiton label blank (it was optional). I picked the Drive letter as N. When I was done, the iPod name was N:\, but it was easy to change.
If you believe you need to reformat and nothing else is working for you, give Partition Master a try.
Ron