itunes says that ipod 5g needs to be restored

All of the sudden the ipod shows up on the desktop, I can see it in iTunes, but iTunes tells me that it needs to be restored.

When I try to transfer music from the ipod to my iMac, it seems to transfer (I can search for it and find it) but it won't show up in iTunes or play.

I've had an iPod since the beginning - this one is new to me.

Any thoughts? Solutions?

Thanks