my Ipod Touch will update but not recover HELP!

I recently got an ipod touch from a family member who recieved an iphone and had no need for the touch. She told me that I had to restore it and update it so that i can make it my own. however when I try to turn it on the screen tells me to plug it into itunes....no problem there. after plugging it into itunes I get a message saying that it is in recovery mode and that i have to update and recover. so i begin the process..... Itunes says that it will take four or more hours.

4+ hours later it tells me that the process has finished but for some reason when i try to use it (or unplug it and plug it back in) Itunes tells me that it still needs to be updated and restored. I have done this process about 6 times now hoping that it's just a kink that needs to be worked out. PLEASE! PLEASE PLEASE!!!! tell me that someone out there knows what is going on. I have tried to call apple but as a woman who works grave yards, i never seem to get the hours right.