It's not at startup, it's while connecting the USB cable. Since you mentioned "at startup", I wonder if you got mixed up with holding MENU+SELECT, which causes the iPod to reboot, or SELECT+PLAY at boot time, which starts disk mode. Both of those are unrelated to this.
It definitely *did* work at one time, at least, but I've broken my iPod a few weeks ago, so maybe the feature's been broken, I dunno.