Hi Jill387,
It appears you are unable to restore your iPod to factory settings. I've located support articles which may help you.
If you can't update or restore your iPhone, iPad, or iPod touch - Apple Support
You might need to use recovery mode to restore your device in these cases:
- iTunes doesn't recognize your device or says it's in recovery mode.
- You see the Apple logo onscreen for several minutes with no progress bar.
- You see the Connect to iTunes screen.
Learn what to do if you see the progress bar onscreen for several minutes.
To put your device into recovery mode, follow these steps:
- Turn off your device and leave it off.
- Plug in your device's USB cable to a computer with iTunes.
- Hold down the Home button on your device as you connect the USB cable. Keep holding down the Home button until you see the Connect to iTunes screen.
- When you see this screen, release the Home button. If you don't see this screen, try steps 1 through 3 again.
When your device is connected, iTunes will open. You'll see a message saying that iTunes has detected an iPhone, iPad, or iPod touch in recovery mode.
Use iTunes to restore your device. Restoring in recovery mode will erase your device. If you previously synced with iTunes or iCloud, you might be able to restore from your backup.
Learn what to do if you don't see your device in iTunes for OS X, or in iTunes for Windows.
If you put your device into recovery mode by mistake, restart it. Or you can wait 15 minutes and your device will exit recovery mode by itself.
I've located information about the error you mentioned. Have you attempted to update iTunes to the current version?
iTunes: Advanced iTunes Store troubleshooting - Apple Support
"Error 39"
This can be caused by outdated iTunes software or web accelerators.
To resolve, download the latest version of iTunes for Windows at apple.com/itunes/download/
Thank you for contributing to Apple Support Communities.
Take care,
Bobby_D