Hi, I have a 40Gb iPod and it works very well.
the issue that you are probbly having with the current MP3 player (besides the limited capacity) is that windows is probbly making WM, WMA or WMV format files to play in windows media player.
You need to make MP3 files.
I would be very surprised if the MP3 player didn't come with a simple MP3 ripping program but if it didn't then you can download many different free programs from the internet.
Just in case you cannot see the extensions of your files (the default), i would reccommend going to windows explorer and then:
1) click the right icon on the menu bar (views) and select details
2) click on the tools menu and then select folder options, click the view tab and set your options like this.
then select apply and then select apply to all folders.
then click ok and you will be able to see all of the detail that you need.
You can now confirm what type of files that you have been making.
it's a start anyway.