I have run into some everyday issues with my ipod. Having found the solutions posted online, I thought I would mirror them here.
Howto: Listen to the iPod and charge from the USB at the same time.
Right click on the icon representing the iPod in my computer and you will be able to "eject" the iPod's fat32 partition which has been automatically mounted and assigned a drive letter.
N.B: Do NOT use the 'safely remove hardware feature'. It's not the same thing as ejecting a disk. Using the 'safely remove hardeware' option turns OFF the power to that device so it can be safely removed. "Ejecting the disk" leaves the power on to the drive.