Well, there's no need to panic - your iPod disk is probably OK. Here are few suggestions that may help you unfreeze the iPod and get it working again.
Step 1. Reset the iPod - Toggle the Hold switch on and off. (Slide it to Hold, then turn it off again.) Now press and hold the MENU and center button together for 10 seconds or until the Apple logo appears.
Step 2: If the above trick doesn't unlock the ipod, leave the device as such to drain the iPod battery. Once it discharges completely, reset and plug it to the computer for charging.
Always keep your iPod firmware updated - you can use itunes to check the latest version of the software from Apple website.
We tested this hack with the iPod Nano though it should work on other models as well like the shuffle or the video iPods.