After you click the restore button, iTunes will ask you to confirm that you really want to do this. If your iPod content is backed up, go ahead.
How to Restore iPod to Factory Settings
By Sam Costello, About.com Guide
Previous
- Introduction to iPod Software Restore
- Click Restore Button
- Confirm iPod Restore Process
- iTunes Downloads and Installs New Software
- Wait for Progress
- Sync Restored iPod
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- Confirm Restoring iPod to Factory Settings