have you installed OS X on it? You will need to have a system folder installed on it to boot from it.
Just attach the iPod to your Mac. If iTunes 2 doesn't pop open on its own, launch it. In the iPod Preferences window, select the Enable FireWire Disk Use option.
Now restart your Mac. Once your iPod has mounted, insert an OS installation disc (either Mac OS 9.2 or OS X) and run the installer. When the installer asks where you'd like to install the operating system, navigate to the iPod and click on Continue to step through the rest of the installation. When you want to boot from your iPod, plug it into your Mac. Once it's mounted, select it as the start-up disk in OS 9's Startup Disk control panel or in OS X's Startup Disk system preference. Restart your Mac to boot from the iPod.