To clarify what is I think a misunderstanding, there is no actual "Options" button, so stop looking for a literal button that says "Options."
Check out this image:
http://images.apple.com/uk/itunes/sync/images/summaryheromac20060912.jpg
If you look at the screen shot, on the left side is the "Source List." It has your Library, your Devices, Store, and Playlists. Devices however will not show up until a device is actually connected.
When you connect your iPod, it should automamtically change the main window in iTunes to show the iPod Summary (as shown in the screenshot).
However, if it does not do this automatically, Devices will show up in the left window in iTunes with your iPod listed within it. If you don't see your iPod initially but see "Devices," click the arrow to the left of "Devices" and it will expand to show your iPod.
Click on your iPod, and the main window will change to show the iPod Summary. This is what is shown in that screen shot I linked to above. In that main Summary tab, you can see at the bottom there are Options. Any option you need that is not listed there can be found by clicking through the other tabs along the top of that main window.