you may have a hardware problem… If so……… you may have to change the HD… Anyway, when you plug it, do you see the battery indicator ? One of my iPods has the same problem… the software noticed a problem in the intern structure (the firmware is not compatible with the update…)… Of course I have the folder with the !… of course until two weeks ago, I had difficulties to mount it in the finder (I have a Mac, an iBook), and the software did not recognize it, as well… But now the software recognizes it… glad… but, it refuses to restore it… According to Apple, I only have a HD problem and it will cost me plenty of money because I have no more warranty… I myself will change it… You can find HD for around 100 $ (more in €)… or more or less… I don't really know how it costs in the USA…
It is not easy to change it yourself but you can find instructions in the Net… I have already checked how to do it myself and it is quite boring but when you dig it, it's quite easy and rapid to do it… but do it carefully… If you don't find any advices else, for instance, if nobody can help you, You'd rather change the HD and the battery : you will a brand new one, with great battery capacity… That's my advice of course, let's wait for others advices before…
voilà…