He tried running the iPod Updater and doing a Restore. The first time, it started, then quit with an error message: "05 error". After that, the Updater greyed out the buttons and would no longer recognize his iPod. Further Googling proved fruitless. He sent an email to Apple Support, but got no response other than an RMA box. Fortunately, his wife forgot to tell him about the box until I had a chance to help him.
When you partition a disk in OS X, it creates some very small partitions at the beginning of the drive that are invisible to the user. I discovered this when using a drive that had OS X on it in a PC I was installing Linux onto. At any rate, it dawned on me that the iPod updater was probably trying to put the OS onto the first partition, which would only be 8KB(if memory serves) in this case. Once that partition was full it crashed, then would refuse to do anything else to the iPod since there was no room left on the partition. Now this is a theory based on my prior knowledge and not any knowledge of how the iPod handles partitions and the OS.
If this were true, then we obviously needed to get rid of the current partition table so the iPod could reformat it the way it wanted it to be. So, we opened Disk Utility, highlighted the iPod in the left sidebar, switched to the partition tab, and chose "1 Partition" from the "Volume Scheme" drop-list, then chose "Free Space" from the "Format" drop list, then clicked the partition button.
When it was done repartitioning the iPod, we ejected it, reconnected it, then opened the iPod Updater and chose Restore. About 1 minute later, my friend was putting songs back onto his iPod. You may need to follow this same procedure if you try to replace the hard drive in an iPod as well.

