...When I take it into the store they do nothing. They just reset it and say's, all is okay. I told them, no this is broken, they REFUSE to help. My warranty is no longer. I guess I am just out the money. Makes me mad. I am so frustrated as I feel like apple just does not care about their customer base...
This seems very fishy; this is the exact opposite of how the Apple store tech support usually operates. About the only way they would do that is if you approach them all pissed off screaming about how "this POS is broken, and you better fix it!" Approach them like you would approach a good friend who you would like to ask a tiny favor of, which seems to work every time. "Is there any chance you could help me?" can work wonders. Using that approach, if they can, they will.
I had this problem with a 4G nano a year or two ago, and all it took was a restore. Try that (not a reboot or reset, a restore, which wipes the flash memory back to silicon and is available on the device page of iTunes once you connect the device. Then you have to reload all of the files.) I never had it happen again.
I f that does not work I would first try a DFU reset, which you can google. If you still have the issue after that, open a ticket with applecare on the net. Warranty or not, they will still do whatever they can to help you.
Why are you using MP3s anyway? AAC is the approved conventional format for iPod, and it sounds better. Do you know if this happens on AACs as well? It could just be some funky MP3s that choke the iPod.