OK - So all your music should be in iTunes so. Can you play these songs on your PC using iTunes?
If so, you'll have no problem when you upgrade your iPod, as iTunes will send the songs back down to your iPod once the update has finished.
I don't quite understand the ' Now i want to download some music that it requires me to download the upgraded versions of the programme from scratch (I think)'. Are you sure that this isn't some dodgy filesharing site that is loading dodgy software onto your PC?