I had a similar problem with my 2g Ipod Touch after upgrading to Itunes 9.2. After quite a bit of searching I found this and it worked as soon as I finished. Apparently something got messed up with the driver and it was seeing my ipod as a camera so you have to update the driver. Follow the steps below.
1 open the device manager or windows button + r is run and then type devmgmt.msc
2 look for the portable devices and find the apple ipod or wherever that is listed on your pc.
3 once u find the apple ipod do a right click on it and click on update driver software
4 take the manual option or browse on my computer and then look for this folder on your computer C:\Program Files\Common Files\Apple\Mobile Device Support\Drivers
there should be the driver that itunes recognize and your windows wont recognize your ipod as a camera again but i repeat u have to make sure u have installed the apple mobile device support u can get it by extracting the itunes+quicktime package using winrar. so click on update or next what ever on the update process and next time itunes will open your ipod for syncing