FWIW, I also had a few problems, but I was having problems streaming. It would show about 1/5th of my saved playlist. A few resets, a few folder moves and a whoooooooole lotta cursing, it finally worked. So try moving files around, renaming them, etc..
oh hey, I just remembed, in the Live Marketplace, there's something called "Optional IPod support".. I have no clue what it does and I can't check because I'm currently watching a DVD, but check that out. It's somewhere in the downloads section, just choose list all and it should be filed with the "O"'s.