Here is the Apple Troubleshooting document that I would do first. Then if that doesn’t work, take a look at this thread at Apple Discussions. Many people felt Yorkwill solution worked for them. Thanks! So here is is:
1. First off you need to have iTunes installed and the ipod touch plugged in
and recognized as ‘something’ e.g. digital camera (it shouldn’t really
matter what it’s recognized as, but it needs to be found by windows).
2. Search for usbaapl in the C:\WINDOWS system folder:
o open windows explorer (e.g. Right-click Start and then click ‘explore’)
o right-click the WINDOWS folder and select ‘Search’).
o type in usbaapl and hit Search – try to ignore the dog!
You should find the driver info in a sub folder of
C:\WINDOWS\system32\DRVSTORE e.g. C:\WINDOWS\system32\DRVSTORE\usbaapl_A65621D65F5B7507DD7B22331826547BDD2D206B
Remember that location (either leave the search box open or copy the folder
name into note pad – you’ll need it later)
If you don’t find usbaapl.sys, usbaapl.inf etc. then your drivers have not
been installed with the iTunes install and you’ll have to reinstall iTunes.
3. Locate the ipod-camera device:
o Open the device manager, e.g. using Start > Control Panel >
Performance and Maintenance > System > Hardware Tab > Device Manager
o Look for a device called ‘ipod’ – if your ipod shows up as
‘digital camera’ it will be under something like ‘imaging devices’.
4. Update the driver:
o Right click the ‘ipod-camera’ in device manager and click on
‘Update Driver’ – the Hardware Update Wizard will open.
o Check the ‘Install from a list or specific location’ then click ‘Next’
o Check ‘Search for the best driver in these locations’. Un-check
‘Search removable media’ and check ‘Include this location in the search’.
In the text box below type (or better copy and paste) the folder
containing the ipod driver information found in step 1 (in the example
above it was C:\WINDOWS\system32\DRVSTORE\usbaapl_A65621D65F5B7507DD7B22331826547BDD2D206B),
then click Next.
You should now see something like ‘Apple ipod device driver’ or so. Continue
installing that device. Once the driver has been installed the ipod will come
to life and iTunes (if you have it open) will show it.