I updated my third-generation iPod firmware and the iPod couldn't work anymore. It displayed the folder icon with the exclamation mark. A few seconds later, it would turn off. No amount of rebooting worked, this time.
After hunting down some forum threads, I found Apple's documentation on this problem. For my case I think the firmware did get updated, but my iPod was stuck in Disk Mode and couldn't play any music.
Sigh ... another re-format this month!
[Update: It's nearly 2am on 26/2/05 and I've only managed to transfer 300+ songs back into the iPod. iTunes keeps on hanging and I've done many iPod and iMac reboots. This is really pissing me off. I'm using the latest Mac software versions. I've wasted so much time and sleep doing this. I'm going nuts. ]
[Update #2: I discovered that my iPod still works fine my PowerMac. Which means there could be something wrong with our iMac. I ran Disk Utility and fixed a gazillion permission conflicts. Quite unnerving, seeing how we only bought it last month.]