I was having same problem today, it had been a couple months since last did a sync so I wasn't sure if something had changed on our desktop or what.... but once I changed which USB port was being used it worked, no need to reboot or anything like that. I tried a few combinations of USB ports and the problem did not occur again once I returned to the *same* configuration that didn't work initially, so definitely something was awry, and changing ports fixed it. Here are the configs I tried, in order:
- iPod -> port on external USB hub -> auxiliary USB port on PC: did NOT work (initially)
- iPod -> port on external USB hub -> on-board USB port on PC: worked
- iPod -> any USB port (on-board or add-in hub) on PC: worked
- iPod -> port on external USB hub -> USB port on add-in hub in PC: worked that time!
Note that I did restart the iPod and no change, so conclusion is that #1 SHOULD have worked first time but for some fluky reason did not, and I can't clearly blame either the iPod or the desktop.
Ultimate conclusion: while on the Sync page of your iPod, try connecting it to each USB port connected to your desktop & hub, waiting 30 seconds for each attempt; the SYNC button might activate, indicating the problem is solved!