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I got my 20 GB iPod (first click wheel generation) a couple years ago.. It worked great for awhile and then I started having all sorts of problems with it.. Tried reformatting, resetting, all of it.. Nothing worked.. I finally got the sad Mac face.. Apparently I'm supposed to send it back to Apple..
Contact Apple they will send you a box. Free shipping. You'll get a replacement within a few days. You can probably do it through an Apple Store as well.