From your comments, it sounds like you are running Windows, if you are on a Mac, let me know. First thing to do is make a backup of your music. Here is a tutorial on backing that up:
http://www.uneasysilence.com/how-to-backup-your-windows-itunes/
Once you have a backup then you can do whatever you want/need to and know that you cannot lose your music.
Since it is Windows, I would try blowing away the iTunes pref file, and if that doesn't cover it then do the old uninstall then reinstall. To do that you double-click on 'Control Panel'. Open 'Add or Remove Programs'. Then you select and uninstall 'iTunes'. Then reinstall from your CD. If your music is missing, I think you can choose File->Import, or File->Add To Library and select the music library that you backed up to pull it in (note that I have not tested this).
Since I am not a Windows person (all my work and home computers are Macs), I'd suggest going to Apple's discussion forums and posting this question in their iTunes forum, since there will be people who are more familiar with the software and how to troubleshoot it there:
http://discussions.apple.com/index.jspa
If you start messing around with iTunes, make sure not to plug the iPod in until you have everything working again.
Obligatory backup comments: You should really make a backup of your music and anything else you care about, since when your hard drive takes a dive you will lose your data. It is not a question of if, but when. Hard drive models are rated for the average number of hours they are expected to last before failing in some way. That number is usually fairly high, but no drive is immortal.