Hi guys
I had the same problem - my husband bought a 30GB iPod the other day and we were having the exact same problem, but we've managed to fix it for us. Here's what we did:
1. Went to software update (under the little apple on the bar at the top) and downloaded the huge Mac 10.4.9 update (it was about 350MB!).
2. Downloaded the latest version of Quicktime and installed it. Note: you can't install the latest version of quicktime unless you've installed the 10.4.9 update. It won't let you.
3. Drag the movie into iTunes from the Finder, and it should take a few seconds to register that you wanted to add it and a minute or so to import. This is not the end, however.
4. Make sure the movie/s you want to transfer to your iPod are selected, go to the 'Advanced' menu, and then 'Convert selection for iPod' (or something like that). This will take a very long time. It took nearly an hour for each 42 minute movie/tv show we added. You can do as many as you like at a time, but make sure the HDD doesn't go to sleep. Even though the website said that the iPods will play the mp4 format, the iPod wouldn't accept it (it converted them to m4v format). They will duplicate in your iTunes folder, annoyingly enough, so it does take up twice the space.
If you use a program called HandBrake to rip movies from DVDs, then it has the feature that converts it automatically to iPod format, but obviously this doesn't play on all computers. But I am not advocating piracy; we had some movie projects we'd deleted from the HDD on a DVD we ripped. 🙂
And that's it. That's all we did, and it worked fine. YAY! My husband was extremely pleased, as you can imagine.
We had the latest version of iTunes aswell.
So hopefully this should work for you! If it doesn't, I'm sorry.
MacBook Mac OS X (10.4.9)