Does not show up under Device, sync is not highlighted

I bought my Ipod Shuffle 4th generation a week ago and have been unsuccesful in synchronizing it with iTunes. I've downloaded the latest iTune 11.0.4 and when I go to Devices under File, the only thing that is highlighted is 'Transfer purchases from ...... Sync, Backup, and Backup restore is not highlighted.

I think both, device and software, are working but to what degree I really don't know. When I plug the USB to my MBP, an Ipod icon shows up on my desktop. iTunes pops up when I plug it in and an icon also shows up in the right corner next to the iTunes store icon. So I know my MBP recognizes it. I have not been able to download any music (mp3) from my iTunes library but I've been able to drag and drop files into it. Also according to the Ipod info, the format is MS-DOS (FAT32). Here is a printout of the device

iPod:

Capacity: 2.02 GB (2,018,496,512 bytes)

Removable Media: Yes

Detachable Drive: Yes

BSD Name: disk2

Product ID: 0x1303

Vendor ID: 0x05ac (Apple Inc.)

Version: 0.01

Serial Number: 000A2700238EB232

Speed: Up to 480 Mb/sec

Manufacturer: Apple Inc.

Location ID: 0xfd120000 / 4

Current Available (mA): 500

Current Required (mA): 500

Extra Operating Current (mA): 500

Partition Map Type: Unknown

S.M.A.R.T. status: Not Supported

I've tried the manual sync but to no avail and read as much as the discussions for the last week. I'm ready to return this item if I don't get some answers. thanks.