Hmm, thats very weird, and even ipod being an ipod shouldn't of done that. The software that I know of isn't buggy, and so shouldn't of caused any problems.
The only thing I can think of is there was a conflict somewhere, with another driver already installed needed to run windows. Thats the only reason that would come up... so I don't understand that.
By any chance is the ipod connected to the comptuer when it doesn't work? Just to see if it isn't something simple like that for some strange reason?
I don't really know how a recovery disc would work with this, as to my knowledge, it loads what was on the computer when you first got it, and so resets windows, with all software too.
If you mean a recovery of windows as in with the real Windows disc, I have no idea how that works i'm afraid.
It is possible a conflict has occured though, and it has either modified or deleted something needed to run the PC. In this case, it's a shame no error message comes up, as you could just replace the file.
Any way of putting the windows disc in and it doing a scan of what files right and whats not? Anyone know?