Hate you!!!!
Actually, it wasn't the user that was the problem but doing what you suggested lead me to it eventually.
I created a new user AND tried another cable. Left the other cable in there attached to #1 FireWire port (laziness) and plugged the second cable into #2 trying another iPod. Lo and behold it worked. Went back trying different combinations and have finally been able to reproduce the problem.
FireWire #1 port will mount the PowerBook and appear to work correctly however will not mount either iPod
FireWire #2 port will mount the PowerBook AND the iPods and behave perfectly.
Solution: FireWire #1 has something wrong with it. Thank goodness for 3 year AppleCare. This baby's going back it's maker to get fixed.
All this time thought it was a cable or iPod problem and yet it was one of the ports on the G4. Bugger!!!
Thanks for your suggestion kndonlee