from the apple site
OK. This was posted over on the apple discussions site, and it worked.
Someone named Michelle posted it.
Okay! I've finally figured it out... if anyone's still not sorted this out, this is what I did:
You need to (I assume) make sure that you delete iPodDriver.kext from /system/library/extensions - I deleted the file last week, but I think it needs to be gone for this to work. Empty the trash as well to make sure it's gone.
Then download the combined updater from
http://www.apple.com/support/downloads/macosxcombinedupdate1039.html - follow all the instructions to install it and, when prompted, restart your Mac.
THEN find the iPod software updater (the 2005-09-23 one is the latest, and seems to work fine for me) in your Utilities folder. When prompted, plug in your iPod... the 'update' and 'restore' buttons should actually become clickable now, instead of greyed-out, after a few seconds. Mine wouldn't work when I tried hitting the 'update' button (something about the updater not having a firmware image...), but when I selected 'update' from the 'options' menu in the menu bar, it asked for my administrator password and started the update. You just need to wait for it to finish updating and say your iPod is 'up to date', then you can eject the iPod and plug it back in again... this time (with any luck) iTunes will open, recognise the existence of your iPod and update all the songs. Without any messages about your software being too old.
Hope this makes sense & fixes the problem for anyone else who's been having this frustrating problem - it was driving me mad...
