This has nothing to do with the iPod touch. Its more of an iTunes issue...
If you are running 32-bit Windows, go to C:\Program Files\iTunes and right click on "itunes.exe". Then go to the compatibility tab and un-click compatibility mode. If you are running 64-bit Windows, go to C:\Program Files (x86)\iTunes instead.
Thank you Genius Jon for your offered help. I`m using 64 bit in Windows 7and running thru` the Program files/iTunes only leads to " Compatibility Trouble". This suggests older settings, but none of which helps.
I`ve reinstalled iTunes. But I cannot find a tab that unchecks a Compatibility mode.