It had to happen one day, Apple disabled the use of iPod Download in iTunes 4.7. But this fix seems to have been done quite hastily and is pretty easy to overcome. Here's how to make the plugin work again:
1) Display the iTunes app content (ctrl-click on the app).
2) Go to "Content/MacOS".
3) Open the "iTunes" file with Hexedit.
4) Look for the ASCII string "iPod Download" as in the following screenshot.

5) Replace any character, for example the o becomes an a.

Be very careful not to add or delete a character, only replace.
6) Save and restart iTunes.

As you can see, iPod Download works again!