Apple 3rd Gen. trying to up date to 5.1.1

Try:

- Powering off and then back on your router.

- iTunes for Windows: iTunes cannot contact the iPhone, iPad, or iPod software update server

- Change the DNS to either Google's or Open DNS servers

Public DNS — Google Developers

OpenDNS IP Addresses

- For one user uninstalling/reinstalling iTunes resolved the problem

- Try on another computer/network

- Wait if it is an Apple problem

Are y sure you have a 3G iPod?

A 1G can go to 3.1.3

A 2G to 4.2.1

Identifying iPod models