I assume that you have formatted the iPod for Media Center since you say that your "initial" sync works as expected. If you have not for any reason, then make sure you format the iPod for Media Center by right-clicking the drive letter from within Media Center and choosing the "Format..." option (forgive me for expounding if you've already done this).
Let's continue assuming that you have formatted the iPod...next, after your "successful" sync, why are you restarting your PC? Is it just coincidence, or do you always restart your PC after syncing, or have I misunderstood something you've said (or not said)? I would suggest that you right-click the iPod dirve letter from within MC after a successful sync and choose "Eject..." to unmount the iPod. When you do eject, wait unitl the iPod screen shows the main menu options before removing the iPod from the craddle.
It sounds as if, based on what you've written, that MC and the iPod plugin are actually transfering the files to your iPod instead of copying them. If this is the case, then hit the Ipod thread and post this to Steve and he'll get back to you (quickly)!
Also, make sure you uninstall MusicMatch using control panel and delete the MusicMatch directory in your (presumably) Program Files directory. You may even try opening the iPod Manager (from system tray) and disabling disk mode for iPod. Just a thought, although I haven't had this problem and haven't had to do this...
Hope this helps,
Wobbley