for the search engines - i recently ran into this problem myself when trying to install leopard from my ipod as an external hard drive.

basically, just hold the select and play keys immediately after the apple logo appears and it will put the ipod into disk mode. hack as necessary.

also, some other neat things to do are the soft reset, whereby you toggle the hold switch at top of the ipod once, then hold the menu and select keys. this will do a soft reboot of the phone should it hang up.

the other neat feature is the diagnostic menu, which is achieved by toggling the hold switch, holding menu and select simultaneously for a second, removing your fingers off those buttons, then holding the previous track button and the select button simultaneously. a little diagnostic menu will come up so you can be 31337.