That actually happens to me almost every time I try to sync my iPod (the same 3rd gen nano). I got it as a holiday gift, and I finally started using it in April, and it didn't get recognized at all. I think that my USB ports are damaged or something, because I have tried about 100 different things recommended on websites. Eventually, what started working is (if I have the time) to just leave my iPod plugged in overnight to the computer and leave both on. Eventually, it gets recognized magically sometime in the night, and the next morning I check. But yea, it get's really frustrating when you're doing everything right and it won't work.