here’s a follow up…poster “zsk009″ on the engadget comments says…

the ipods firmware can be updated without restoring the entire ipod, before running the updater follow these steps:

go on your ipod to ipod_control>device>sysinfo
and open the file in wordpad.
find this line of code:

buildID: 0×03028000 (3.0.2)
visibleBuildID: 0×03028000 (3.0.2)

change a number with a lower number

buildID: 0×03018000 … Read the rest