iPod touch stuck in recovery & my PC won't recognize it!

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Mar 2, 2010
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I've had this 1st generation touch for over a year & a half and haven't had any problems until now. It is NOT jailbroken. I plugged it in last night to charge & iTunes said there was an update available for my device, so I said I wanted to update it & then went to bed. When I went to unplug it this morning, I noticed an error message on iTunes (don't remember what it was...) and now my iPod is in recovery mode (the picture of the usb cord & the iTunes logo are on the screen), and when I plug it in to my PC, the "found new hardware" wizard comes up instead of connecting me to iTunes. And when I go into iTunes, it doesn't recognize my iPod either.
I've uninstalled & reinstalled iTunes, restarted my computer, held down the power & home buttons....don't know what else to do!! I'm going crazy here! :'( I made an appointment at an Apple store for tomorrow night, but I'd like to fix it on my own if possible because my warranty is up.
 

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