I didn't find my exact solution to this problem anywhere so i decided to post it because it worked for me perfectly. when i always tried to restore that firmware would be on my desktop, documents, etc but never in iPod Software Updates. When ever i put the firmware, whatever one it is (2.2.1, 3.0, Custom Firmware for JB,) in those places, the restore would come back with the Error "1600" thing. So if your having this problem try and put the firmware in your iPod Software Updates folder. Here is the path on XP SP2: C:\Documents and Settings\User\Application Data\Apple Computer\iTunes\iPod Software Updates Hope this will help anybody in the future.