I posted a while ago on the problem a client had experienced with iPod Service Module needing to Close, what now seems to be a common problem for iPod and iTunes users. If you read that you might have thought I'd found a cure.
Unfortunately I think I was wrong. Judging from the many people who have contacted me over this the full range of corrective measures (install, uninstall, close firewall & virus scanners) all have no effect. My thinking now is that this is a problem arising from iTunes (under Windows) and essentially there's nothing any of us can do. I don't think anything you did brought it on you, its just a random glitch.
If you get hit by the iPod Service module needs to close message I don't think you can fix this, its out of your control. However I have suggested to some people that until an iTunes fix comes along you can look at using XPlay 2 from Media Four (www.mediafour.com). This is a great piece of software and should allow you to move tunes on and off your iPod until a proper fix is found.