Factory reset issue

Hey
I just picked up an iPod touch 2nd gen for a christmas gift. The guy I bought it from restored it to factory settings before I bought it off him, but it hadn't rebooted since I got it. Its still stuck on the screen with the white apple and the circle thing on top spinning. Every few minutes it will flash and refresh the screen but it been plugged in for hrs overnight. What do I need to do to get it working?

 

My guess is that there was an error during reformatting and it can't seem to get past that point. Any suggestions? I've tried the solutions on Apples website