Restoring Updater question

Ok so my 5g video gave me the unhappy face. I decided that just to restore the updater. I download and it showed up fine on my computer. However when i try to open it, its says please plug in my ipod. But when i try, it just gives the unhappy face. Help??

I havnt been very pleased with my ipod, since it came with scrathes on it, only songs the ive imported play on my ipod, all songs Album Art is "Aerosmith: Young Lust" and the "sleep" choice never turns off when its supposed to. I dont think the Ipod i payed 400 bucks for is really living up to expectations.......Should i retry to return it??(I bought Warrenty)