Apple released the iPod Reset Utility 1.0.2 available for download from the Apple Support webpage. It is only dedicated to iPod Shuffle owners.
About iPod Reset Utility 1.0.2 for Mac
Use iPod Reset Utility to restore the following iPod models back to their factory settings, when iTunes is unable to do so:
iPod shuffle (1st Generation)
iPod shuffle (2nd Generation)
The restore process completely erases all music and data on your iPod, and installs current iPod software on it.
For detailed information on this Update, please visit this website: http://docs.info.apple.com/article.html?artnum=305204
Note: iPod Reset Utility is intended for use only with the iPod models listed above; other iPods are not supported. If you are not sure which iPod you have, see Apple Support
