Same problem here when connecting my 160 GB IPod, as MC18 would hang shortly after connecting. But my old 120GB would connect perfectly. Also had to go back to MC17 to reinitialize the 160GB IPod, which now seems to work in MC18. Much time was wasted in trying to figure out what went wrong as older versions of MC18 worked well with the 160GB IPod.
Hopefully I won't lose connectivity in the future, but as a precaution, I'll be keeping MC17 around.