Mark,
I have a Nanode classic and older Nanode v5. Both work fine for me on the Arduino v1.0 and v0.23 (I haven't upgraded to 1.01 yet though).
My board type is set to "Duemilanove w/ATMeg 328". Ive not changed the bootloaders as shipped. You'll need to restart the IDE after changing this (I think )
Ive had occasional problems like 'not in sync' you describe - but usually this comes about if I interrupt the compilation and upload process before its finished. exiting the IDE and restarting it resolves it in my case though. Have you any other software that may be polling this com port ?
Ive also had problems when attempting to run the IDE from a network share - so I keep copies local to each machine (mainly Win7 and XP) where I use them. Only my Libraries and sketch folder are on the network share.
I would check obvious stuff like have you got the ftdi cable attached to the Nanode header the right way round; and does the serial monitor work (I can't remember if you'll see anything with a 'blank' device though).
Are you sure the serial port is correct, and you've got the correct ftdi drivers. Ive also had a problem where the ftdi adapter was duff - it would power the Nanode, and the light on the adapter would work - but no 'bing bong' when plugged into the PC - even though (I think I am remembering rightly) the IDE would 'see' the COm port in the list of serial ports. i suspect this was v. rare - but if you can try a different connector it may help in your process of elimination.
Good luck !
Jon.
Mark - this raises a good point - some FTDI cables dont need the reset button held down...(mine dont)
Checking the pins on the Nanode adapter I have, they are all clean soldered;