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The Connect to iTunes is now the preferred method of interacting with iDevices. The reason it will be greyed out is that the Calibre Apple device plugin is active and you have your iPod plugged in. This method has the advantage that the Apple device does not need to be connected to get the book transferred unto iTunes..
To be able to use it you need to go into the Calibre->Preferences->Plugins->device Interface Plugins and disable the Apple Plugin and restatrtCalibre. Now you will be able to use the Connect to iTunes feature, and leave iTunes to handle syncing with the iPod as and when appropriate.
There is also a set of recommended iTunes settings for the syncing to work well (they tend to be the default ones). This should (I think) be covered in the Calibre User Guide.
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