"The issues you noticed is sadly a bug in the apple firmware.
When you turn the iPod off it goes in to a sleep mode - it stays in this sleep mode for anything from 8 hours to 36 hours (time is dependent on battery level and battery condition), after which it switches to a deep sleep.
When the iPod is resuming from the deep sleep it reloads the operating system from the drive, I’d say something like a soft reset - however it is this which is the problem. The firmware polls the CF card and does not wait long enough or is not told to wait by the CF card - so it throws an error. The funny things is this problem sometimes occurs with the hard drives as well, it seems the time-out for the resume from deep sleep is very aggressive.
I am still experimenting with this issue but I think UDMA and certain very fast CF cards have the speed and communication skills to ask the iPod to hang on while it gets ready (like the hard drive would do). So they do not seem to be effected by this bug.
As a side note, when this restore message occurs the iPod will switch off after a few seconds and hitting the menu button will get it to restart normally - you do not have to initiate a hard reset.
I will have an article up once I have investigated this further."