I restored my iPod Touch but it hasn't done anything! Help?!

My sister's iPod has been stolen and we finally got it back from the thief after threatening to tell the principle (I'm in high school). Now her iPod is disabled since they were trying to guess her password. I've already restored the iPod but it hasn't done anything! I connected it to iTunes and it says 'Do you want to allow this computer to access information on 'Juliet's iPod Touch'?' So I clicked continued and it says 'to allow access, please respond to your iPod Touch'. Well the iPod is still disabled! Help!