When I add video to my iPod Touch 8GB (2G), there is no problem with the iPod library.
However, if I change some of the video settings - the iPod touch library will hang with the "updating library" message. If I restart the iPod, the library will appear, but freeze after about 2 seconds. This applies to the video and music libraries.
To recreate this:
1. Access a video on the iPod
2. Right-click and select 'Edit track details'
3. Change media type from 'Video' to 'TV Show'. Press 'OK'
4. Click 'Save Changes' and then access the library after the iPod has completed its sync.
The only way to "repair" the iPod is to sync it with iTunes.
iPod Model: MC086BT
Version: 3.1.3 (7E18)