I have bought my 30GB iPod Video just 3days ago, and it tried to upgrade the ipod updater to 1.1.
I have updated my ipod without a problem. And I had also updated to latest version of iTunes.
Itunes had given error few times and closed itself while optimizing photos before transfering them to ipod. I have sorted out that it was due to my photo folder being over 2GB's, than started importing them in smaller portions by adding a new folder each time. Afterwords, photos and pictures copied to iPod without problems.(but i have to add, i have received a nonsense error like 'itunes cant write to folder or something)
After a bit of dazzling and struggling i was able to play videos and music as well. But after few seconds iPod screen frozen and i wasnt able to do anything. I have reboot it, and tried to change songs, and after few songs, the screen frozen again, wheel was not functioning but funny part, music was still playing. I got online and checked the forums and seen other people having those problems after upgrading to new firmware. I have uninstalled the 1.1 firmware and installed the one on CD, and I have also downgraded my version of iTunes as well. Now things seems to work all fine.
I just don't get why apple withdraws this buggy problametic version of firmware, they will drive more users go mad and not every computer/iPod user would figure out why it happened themselves...
One more thing I have to add. Why I am also having hard to understand why each version of iTunes started consuming unbelievedable amount of RAM on computer. I have 1.4Mhz centrino with 512 RAM, and the sound distorts(slows down) over iTunes when start copying files from DVD. Or it cause errors and shutdowns 'on optimizing photos' stage on iTunes when i try to copy photos to my iPod. I don't think 1.4Mhz and 512mb ram shall be called as low resource simply to use iTunes. They really need to retest, debug and optimize their software. And immediately, remove that 1.1 firmware from apple.com until they resolve the bugs and error inside it.