I have FAT32 on my iPod. I encountered a read error when attaching it to my Windows box, and used this method for repairing it:
C:\>chkdsk f: /r <- locate bad sectors
This took about 15 minutes. There was an error in the iTunes database file, \iPod_Control\iTunes\iTunesDB. I couldn't fix it, so I restored the iPod using the iPod Updater. This meant I had to transfer all the MP3s again.