Ack, never even thought about that he/she might be a Windows user. I just assume that most people here are Mac users. Also, if you have an older version of iTunes, it might not work either. I had an older version of iTunes, and when I got my 30gb, it made me update.
As for the auto update preference, I personally have that one shut off. I like to manually control what goes on my iPod, especially since my wife and I have very different taste in music.