Hey KickSock and other who've posted,
Okay, I'm not sure if this is related to your issue, but try this:
1 - While you are getting your error message while trying to update in iTunes, go to "My Computer" in Windows Explorer (leave iTune up and running).
2 - Right-click on your iPod's drive, and click on "Eject".
3 - Go back to iTunes, and try to update your iPod again.
Also, although this isn't the same error message, try the technique in this post for error 1417 (when updating your iPod) ->
A solution for error 1417, occuring when updating
I hope this helps you guys,
-Kylene
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