iTunes 7.1.1.5 seems to be working ok, here. However, we had a problem
trying to sync an iPod Shuffle (the tiny one) -- the system seemed to hang
up during the sync step. To make a long story short, I would recommend
updating the iPod software immediately, ASAP, at first opportunity after
plugging it in with iTunes running. Use the Settings tab.
In our case, the iPod looked like an ordinary USB drive, as far as Vista was
concerned. After the software update (which had Apple "bug fixes"), the
iPod behaved normally, and it no longer showed up as a USB hard drive (or at
all).
This may have been a glitch caused by an iPod configuration that allows you
to use the iPod as a external drive as well as a music player, which MAY be
inappropriate in Vista in the current state of the art.