nuffsaid said:
That's it alright. I went back to the shop and they just put me on to the manufacturer who are going to send me packaging to send it back to them to fix, but I might try and sync it now using my laptop which has Vista and see if that works. What a nightmare!!!

So what happens then can I no longer use my W2K computer??? no-one on that thread has found a fix apart from using an XP machine....FFS!!!
Right, what's happened here, clearly, is that you are stuck with a PC that Microsoft (I think) isn't supporting any more, so now Apple isn't.
Best choice (I think) is to return your iPod to previous software, and here's how to do it - you may need to do a little research on bits of it though, specifically the Mac instruction, but I don't know windows.
Here's how to do it:
1/ Connect your iPod to your computer, and then select it in the iTunes Source list.
2/ Depress the Option key on your keyboard, (again different on Windows) then simultaneously click the Restore button in the iPod's General tab in iTunes.
3/ A Choose File navigation window appears. Navigate to 'Your Users Account>Library>iTunes>iPod Software Updates folder. This will be different on a Windows system, but someone here may know.
4/ Inside that last folder you should find all your previously installed iPod updates, you must select one that ends "Restore.ipsw file" and probably has the numbers 1.2.1 or 1_2_1 in there. It's gonna be the most recent version before the one you just installed. I reckon search your system by the 1.2.2 numbers and find where they are stashed to find out which one to navigate to.
5/ iTunes should then downgrade your software to the previous version, so you can get things working right again.
Sorry I don't know the way to do this on Windows really - it's just I don't use that OS, but it can be done.