Just for my understanding:
- you get the error message "The currently attached accessory is not compatible with this ipod."
- you do no longer get the "radio" button in the iPod menu and therefore cannot use the radio remote
Is that correct so far?
information about this error message can be found here:
http://docs.info.apple.com/article.html?artnum=302248
It is described for the iPod Nano but applies for the video iPod as well.
Have a look at your remote. The part which you plug into the iPod: does it fit into the same port in which you put the USB cable, or do you plug it into the headphones port?
If you fit it into the headphones port, you mixed up the remotes. The old remote (without radio) is not compatible with the 5G iPod.
If you plug the remote into the correct port and it still doesn't work, you should try to borrow another remote to see if that one works - if yes, send your one off for repair at
http://depot.info.apple.com
If not, you might have an issue with your iPod and it might make sense to call the tech support.
Cheers
MacMini