Making a backup folder is really easy. First of all make a folder called "Music Backup" on your desktop. Then close iTunes (if running) plug ur ipod into the usb drive. As the computer recognise it as an external harddrive, open up that drive.
You should see some music files in that external drive. Now copy all of your music files and paste them into that folder called "Music Backup" on your desktop.
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From what 007 suggested, that would work too. Take your ipod to another computer. Install iTunes there and formate the iPod. (This way you will loose all of your music on the ipod though)
Then go back to your own computer plugin the ipod and copy new music.
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Anyways, you can try both ways but I suggest you to try to backup your music first for whatever reason. It's always a good idea to have a backup copy.
Enjoy
