(Mostly for my own info, if it happens again, although finding this in the first place was easy: google ipod reboot cycle.)
Firmware is just like software, except worse. And it sucks. I crashed my iPod (I sinned, apparently, I asked it to play a podcast) and it went into a reboot cycle.
Putting iPod into Disk Mode was useful, I did that and then told iTunes to reset it. Sucks, because I got a 60gb ipod for a reason, but better than reboot/crash.
I'm assuming / hoping this will fix it.