Hi hearrudy and welcome,
Sorry to point to the obvious, but did you try simply to drag and drop the converted files into iTunes?
You're right though, you should be able to use the "add file...folder" option in iTunes.
Are the files intact on your hdd?...able to play them with VLC, QuickTime, etc.,?
Any errors when you try to add them?
I have the same Ipod..a 30 GB 5th gen. I must've converted over a 100 movies...never had a problem.
It's a breeze to sync/unsync various titles.