iPod touch icon...where???

Does it appear in the sidebar after you go to the View menu, then Show Sidebar?

I see that you do not have the View menu visible. Click the small icon in the upper left of the iTunes window, then the toolbar containing the View menu will appear.

I see that the iPod is still not appearing. In that case, try the suggestions in this support document: http://support.apple.com/kb/TS1538

Have you tried to reboot the computer since then?