iPod displays "Use iTunes to restore" message
Symptoms
When you try to use your iPod, its screen displays one of the following messages:
"Use iTunes to restore"
or
"Connect to your computer. Use iTunes to restore."
iPod nano (4th generation)
iPod classic and iPod nano (3rd generation)
iPod (5th generation)
iPod nano
Products Affected
iPod nano, iPod nano (3rd generation), iPod classic, iPod (5th generation), iPod nano (4th generation)
Resolution
Connect the iPod to your computer. One of the following messages should appear on the computer, depending on whether your computer is running the Mac OS X or Windows.
Windows
Your iPod needs to be reformatted for use with Windows. Would you like to run iTunes to restore your iPod now?
Mac
iTunes has detected an iPod in recovery mode. You must restore this iPod before it can be used with iTunes.
Note: If you do not see one of these dialogs, ensure that the latest version of iTunes is installed on your computer. You can get the latest version of iTunes here.
When you click the Update or OK button, iTunes will give you the option to either update or restore your iPod. Click the Restore button to restore the iPod.
If the iPod continues to display this message after restoring it, keep reading for more possible solutions.
Reset
The iPod may have locked up. Reset the iPod. After resetting iPod, attempt to restore it in iTunes.
Service
If none of these steps address the issue, your iPod may need to be repaired. You can arrange for service at the iPod Service Website.
Additional Information
Older model iPods display a folder with an exclamation mark on screen as documented in article TS1405 when they experience this type of failure.