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I can't speak from experience, however the iPod should easily be used as a hard disk. From a Mac perspective (I know you're using a PC) you can mount the iPod, store files, even install the entire OS and boot from the iPod. From the PC, you should be able to store data but there may be an app or setting on the iPod to identify it as a removable drive.
What you should research is using your iPod's music once you perform a re-install of Windows. You may need to backup your iTunes license information or "unregister" your current Windows/iPod before attempting to install a new OS. For example, I plugged a friend's iPod into another person's PC and the tunes were greyed out - it wouldn't let me play them or copy them. A clean install of Windows may give you the same problem.
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