Another option would be to connect the Ipod to the computer and from Itunes select to repair the device (at least I believe that is the option) Doesn't always work but has sorted out softwre problems on a couple of Ipod's I have had.
More I think of it the more I am sure the option isn't actually called that, however if you connect the Ipod and then click to view the Ipod and it's contents from inside Itunes then there should be something along those lines on the first page you see (the one that shows current capacity along with types of file on the device)
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