Good day
It seams that your iPod has not overwrit the old iTune version with the new you installed. Try to install the old version of iTune you had in the beginning. It might overwrit a few song but at least you will not loose all of them.
If this does not work, your best bet would be to download the music you have on your iPod back to your hard drive on your PC. Then, you will be able to re-install the iPod software along with the iTune.
If you can not do that directly from the iPod. You can install your iPod Hard drive into a Laptop to recuperate your music by booting to the DOS prompt and copy all of them to a PC.
To stay on the safe side, you should stick with what is working, updates and upgrades of most software creates more problem than it solves. Wait at leat six month of a new version to be available before using it. Software corps tend to get "full of bugs software" and relies on people like you and me to detect and go through problems (such as the one you have right now).
Need more assistance please advise.
Good day and good luck