I was just coming back today to report that I haven't had anymore stops to playback, and saw your reply. I'm happy that its fixed. I tested it throughout the week just gone, and it looks OK.
After my previous post, I reset the ipod (holding MENU+Select for 5 seconds) and the problems haven't come back. I would have thought by virtue of going into the ipods disk mode when connecting it to the PC would have caused it to reset, but it looks like thats not the case.
Thanks to lowlight for the fix, and for your help pondlife.