eBay would probably support you because they often seem to support the buyer without even considering the facts.

But I think you're expecting too much from your seller. The ipods were clearly stated to be 2nd Generation so you knew what you were buying.

If you wanted to perform actions which require more recent firmware you should have bought a more recent model. Or checked before buying whether 2nd Generation ipods could be upgraded. It wasn't up to your seller to state this.