Have you all made sure that the iPodService.exe process is running before hooking up your Ipods? (CTRL-ALT-DEL, then look under processes.) Check before you load Itunes and if it is not there, Load itunes to see if it shows up. If it does not show up, then try the following:
If IpodService.exe is NOT running in your processes tab, then go to start button/run program/type in SERVICES.MSC and press enter.
Scroll down until you locate IpodService.exe and make sure it is set to Run Manually. (This means it loads up whenever Itunes does, not before then.) Make sure it reads "started" If it doesn't read "started" right click on it and select "start".
Right click on it again and go into properties and make sure it is set to MANUAL and NOT STOPPED.
Also Check and make sure that ItunesHelper.exe is running as well. If ItunesHelper.exe is NOT running, then do the following:
Go to start button/run program/type in msconfig and press enter. go to the startup tab, and make sure the check mark box next to ItunesHelper.exe is checked.
Once this is done reboot your computer load up Itunes, Make sure the services are running, via the processes tab (CTRL-ALT-DELETE) then try hooking up your Ipod. Plug in the USB cord, and then Plug it into the Ipod nano. After 20 seconds or so the Ipod should display in Itunes.
Beyond that:
Have you checked to make sure that there isn't a drive lettering conflict?
Beyond THAT:
Try turning off your antivirus software and see if that helps (you may have to shut down the processes via the processes tab.) And try again.
Something had to have changed with the system settings, either something is conflicting with the Itunes & Ipod Application or configuration settings were changed somehow.
This sounds like an Itunes or services.msc issue and not specifically an Ipod issue. Though I suppose the USB port could have gone bad. (did you try a different USB port?) More likely it's a software issue.