Hi, yes, my issue was resolved, but it took a lot of patience and you can tell your friend
because I'm sure there was nothing wrong with the
original iPod! It had to be a synching/iTunes issue.
I just had to be patient and sync little by little. To be safe I would eject iPod after several minutes to allow library to close itself up, if that's what it does.
Additionally, I'm suspecting the files were never wiped off, even when iPod main screen said 'no music' and 'no podcasts' because when I looked on settings > about (on iPod itself), I could see the amount of video, audio being taken up. A subsequent sync would suddenly show all those files again, so all that reformatting I did just made me have to start all over without necessity. So check the settings > about before you reformat the iPod.
One thing which might have added to my problem is that my PC's USB doesn't seem to be running as 2.0 speed, even though I made sure and re-installed the upgrade to 2.0 software. Everything synched NOTICEABLY faster and with little hassles when I synched with my laptop at 2.0 speed.
So I synched it on laptop until all done, then backed up all my 'my music' (includes ALL iTunes, Podcasts, and music files) to external HDD, transferred those to my PC and sync with PC just fine now.
I hope that helps. I'd still like to know for SURE what caused all this problem! I know exactly what caused it on mine...........iIt all started when a podcast I download every day suddenly reset something on their server, which caused it to reset their podcast dates, making hundreds of them visible on iTunes. Since I had iTunes setting to 'download all' podcasts it did and that's when the wheels came off.