I expect you are doing everything right. I had an awful job getting a mini to work although a 20 GB works fine on my comp and the mini worked fine in a later model Mac (mine is about 5 or 6 years old)
The mini now works ... albeit slowly... on my mac after doing the latest iTunes update. I have read that others are having problems AFTER the up date.
You have not said which iPod9 (4 or 6GB) and platform(but I imagine that is Windows) and OS you are using, and if you had it might not have helped much. I spoke to a local computer reparer recently and he said there is a certain amount of incompatibility between iPods and computers.
At one point after I had restored the iPod for the n'th time it did start to work correctly but after loading about 3 tunes it gave up again.
This hasn't helped much but if you go to the Apple discussin forums you MIGHT find a helpful reply to a similar post.
http://discussions.info.apple.com/