I've never seen that error, what model of iPod is it? I get a "do not disconnect" message on the screen of my iPod & then I have to eject the iPod (from within iTunes). Once I've ejected the iPod, I can go to 'safely remove hardware' & unplug it. You might find some answers on the iPod site
http://www.apple.com/support/ipod/

Try ejecting the thing. Right click on the iPod in the source column of iTunes > eject.