Well, that's odd. iTunes recognizes the iPod but won't interact with it. Okay, a few questions:
1) In iTunes, when the iPod is connected you should see it listed on the left side. When you click on it does the right pane display the iPod contents? And on the bottom does it show syncing options? Are they set up properly?
2) In iTunes - EDIT - PREFERENCES - Device Tab:
A) Make sure "disable automatic syncing" is NOT checked
B) Is your device listed?
3) I assume there are songs listed in iTunes library. What happens when you click on FILE - SYNC IPOD?