I changed my iPod's Music setting screen to sync Entire music library (without doing an Apply), for the purpose of taking that screenshot. It actually looks like this most of the time, set to sync Selected playlists, artists, albums, and genres.
The number of songs (next to Sync Music) reflects the numbers the setting syncs. So, if you do not currently have it set to Sync Music (not checked), there would be no number there.
If Sync Music is currently not checked, that is why the iPod's content does not automatically update based on changes to your iTunes library, such as adding new songs and updating playlists. It is set to manually manage music on the iPod, so you have to add new songs and update playlists manually.
My iTunes Library looks like everything is there, including new songs purchased and new Music Playlists I set up.
If everything is in your iTunes library, you won't lose anything by changing sync settings for the iPod. The iPod may get erased in the process, but iTunes then syncs your content back from your library based on how you set it up to sync music. You can set it up to sync all of your songs (if your entire music library can fit), or just a selected portion of the library. Syncing the iPod does not affect what is in your computer's iTunes library, which is your "master copy." (It's a good idea to back up your computer's iTunes library, in case your computer or its drive fails.)
When I click on Sync, it shows on my iPod that it's syncing for about 5 seconds. then I keep getting a pop-up window that says, "Insert Disk into Removable Disk (F:).
The iPod still syncs (for a few seconds) when you click Sync, but if it's not set to Sync Music, nothing gets updated on the iPod. I'm not sure what the error messages is about... Is the iPod seen as the F: drive by the computer?