My iPod is going on 3 years old. Never has given a lick of trouble, nor has iTunes. I have a fair number of MP3s I've ripped off my own CD collection along with a few songs purchased online and many more from coupons, "freebie" promotions, etc.
There is no "erase and reinitialize" command for the iPod,
AFAIK, but there is a massive library of utilities you can use to do everything from PDA functions to setting up the iPod as an external hard drive...