the dreaded “Sad Face” icon is not a good sign at all! Its sad set of XX eyes indicate that you've got a problem. Whether the iPod has been dropped accidentally, or, perhaps more worrying, the sad face icon just showed up for no apparent reason, it is definitely something to be concerned about.

The Sad Face Icon usually appears when the disk scan is not able to retrieve the data on the hard disk. A few different things can cause this problem. Accidents, such as dropping the iPod, are one of the main causes. Unfortunately when the Sad Face Icon does appear and the iPod cannot be seen on the source list in iTunes, it usually means that you are going to have to restore your iPod.

But before you panic and get too stressed about the whole situation, take the time to follow some simple steps that will hopefully take care of your unhappy little iPod.

http://www.i-pod-info.com/The_iPod_Sad_Face.html