, I had this error once before...except I was still able to access the iPod as a disk...It took me about 36 hours but I figured out what had happened and created an iPod Rescue Disk. At least in my case, the issue was with the iPod and not WINDOWS, a simple iPod Formatting / Reinitialization helped me get mine to work. I'll try to find that disk with the software and tell you what I used if matty hasnt already resolved the issue for you. Try searching Google for "iPod Rescue Software".
Please DO NOT PM me regarding this, I will post here when/if I find the info.