Apple has posted an update for its iPod reset utility without providing any details on the bug fixes.
Use iPod Reset Utility to restore the following iPod models back to their factory settings, when iTunes is unable to do so:
• iPod shuffle (1st Generation)
• iPod shuffle (2nd Generation)
The restore process completely erases all music and data on your iPod, and installs current iPod software on it.
For detailed information on this Update, please visit this website: http://docs.info.apple.com/article.html?artnum=305204
The update is available for download on Apple's support [1] web site.