huiam, try the Apple solution first " To troubleshoot this issue, try the following solutions in this order:
Disconnect and reconnect your iPod to iTunes, and then attempt to restore or update the iPod again.
Restart your computer and then attempt to restore or update the iPod again.
Try connecting your iPod to a different USB port, and then attempt to restore or update the iPod again. Connecting to a USB 2.0 port is recommended. For Windows computers, refer to Identifying USB 2.0 ports on your computer for instructions.
Remove any USB devices not manufactured by Apple that you have connected to your computer (it is not necessary to remove your keyboard or mouse). Then, attempt to restore or update the iPod again.
Update to the latest version of iTunes, and then attempt to restore or update the iPod again.
Try to restore or update the iPod again using a different user account for your computer. For example, create a new test user account on the computer with admin rights, and with iTunes installed, try to restore/update the iPod. For instructions on how to do this, follow steps under the heading "Restore using a new user account" in this article.
Try disabling Disk Use on your iPod and attempt to restore or update the iPod again. If that doesn't work, try enabling Disk Use on your iPod and attempt to restore/update. Refer to Putting iPod into Disk Mode for instructions.
If using a Windows PC to restore or update your iPod, try to re-register ".dll" files as described under "Solution 1" in iTunes displays -50 error message when syncing iPod on Windows XP
If using a Windows PC, try to update or reinstall your Windows USB drivers, referring to the section titled "iPod only: Updating, or in some cases reinstalling, the drivers for your computer's USB interface may resolve this issue." from here. You can also try to unplug all your USB devices. Plug your IPod USB into the back of your PC. Load up ITunes. Plug the other end into your IPod. Use your mouse and uncheck the option to Auto-Sync. Proceed to Restore your IPod. Re-sync your IPod.
The only other thing to try is to place your iPod ito Disk mode. If necessary, verify that your iPod has a Click Wheel.
Before placing the iPod into Disk Mode, verify that it is charged.
Toggle the Hold switch on and off (set it to Hold, then turn it off again.)
Press and hold the Menu and Select buttons for at least six seconds, until the Apple logo appears.
When the Apple logo appears, release the Menu and Select buttons and immediately press and hold the Select and the Play/Pause buttons until the Disk Mode screen appears.
Connect the iPod to your computer; the screen on the iPod will should say "Do not disconnect". Restore from there. The error is caused by a corrupt iPod, so it is possible that your HDD is failing. If none of the above works, try the diagnostic made and see what it tells you. Check on here for how to get into diagnostic mode and what all that information means. Hope this helps, good luck.