In most cases, the sad iPod icon indicates a hardware issue. If you are able to force iPod into Disk Mode, then it may not be a hardware issue, and you should try to restore your iPod with the latest software.

If you cannot force your iPod into disk mode and restore it, then your
iPod is in need of service, set up an iPod Service Request or visit your local Apple Retail Store.


http://www.zolved.com/synapse/view_c..._sad_iPod_icon